On December 31, 2020, Crane Associates owned the following securities, held as a long-term investment. The...

On December 31, 2020, Crane Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee.

Common Stock	Shares	Cost
Gehring Co.	2,000	$60,000
Wooderson Co.	5,200	36,400
Kitselton Co.	1,400	25,200

On December 31, 2020, the total fair value of the securities was equal to its cost. In 2021, the following transactions occurred:

Aug.	1	Received $0.50 per share cash dividend on Gehring Co. common stock.
Sept.	1	Sold 1,560 shares of Wooderson Co. common stock for cash at $6 per share.
Oct.	1	Sold 800 shares of Gehring Co. common stock for cash at $33 per share.
Nov.	1	Received $2 per share cash dividend on Kitselton Co. common stock.
Dec.	15	Received $0.50 per share cash dividend on Gehring Co. common stock.
Dec.	31	Received $2 per share annual cash dividend on Wooderson Co. common stock.

At December 31, the fair values per share of the common stocks were: Gehring Co. $32, Wooderson Co. $6, and Kitselton Co. $16

1. Journalize the 2021 transactions and post to the account Stock Investments. (Use the T-account form.)

Example:

Date	Account Titles and Explanation	Debit	Credit

2. Prepare the adjusting entry at December 31, 2021, to show the securities at fair value.

3. Show the balance sheet presentation of the investments at December 31, 2021. At this date, Crane Associates has common stock $1,468,000 and retained earnings $1,177,000.

Expert Solution

ekkarill92 answered 2 years ago

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