Question

In January 2020, the management of Oriole Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.

Feb. 1		Purchased 800 shares of Muninger common stock for $44,000.
Mar. 1		Purchased 1,000 shares of Tatman common stock for $25,000.
Apr. 1		Purchased 70 $1,240, 9% Yoakem bonds for $86,800. Interest is payable semiannually on April 1 and October 1.
July 1		Received a cash dividend of $0.50 per share on the Muninger common stock.
Aug. 1		Sold 266 shares of Muninger common stock at $65 per share.
Sept. 1		Received a $1 per share cash dividend on the Tatman common stock.
Oct. 1		Received the semiannual interest on the Yoakem bonds.
Oct. 1		Sold the Yoakem bonds for $85,800.

At December 31, the fair value of the Muninger common stock was $56 per share. The fair value of the Tatman common stock was $24 per share.

a.

Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.) (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
b.

Prepare the adjusting entry at December 31, 2020, to report the investment securities at fair value. All securities are considered to be trading securities. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
c.

Show the balance sheet presentation of investment securities at December 31 2020

d.

give the statement classification of each income statement account.

Answer 1

(a)	DATE	DESCRIPTION			DEBIT	CREDIT
	Feb 1.	Stock investments-Muninger			44000
		Cash				44000
		(Purchased 800 shares of Muninger)
	Mar 1.	Stock investments-Tatman			25000
		Cash				25000
		(Purchased 1000 shares of Tatman)
	Apr 1.	Debt investments-Yoakem bonds			86800
		Cash				86800
		(Purchased 70 $1240,9% yoakem bonds)
	July 1.	Cash		(800*0.50)	400
		Dividend income				400
		(Received cash dividend)
	Aug 1.	Cash		(266*65)	17290
		Realized gain on trading securities				2660
		Stock investments-Muninger
		(44000/800)*266				14630
		(Sale of 266 shares of Muninger)
	Sep 1.	Cash		(1000*1)	1000
		Dividend income				1000
		(Received cash dividend)
	Oct 1.	Cash		(86800*9%*6/12)	3906
		Interest income				3906
		(Received semi-annual interest on bond )
	Oct 1.	Cash			85800
		Realized loss on debt investments			1000
		Debt investments-Yoakem bonds				86800
		(Sold the yoakem bonds)
		Stock investments-Muninger
	Date	Account titles			Debit	Credit	Balance
	Feb 1.	Cash			44000		44000
	Aug 1.	Cash				14630	29370
		Stock investments-Tatman
	Date	Account titles			Debit	Credit	Balance
	Mar 1.	Cash			25000		25000
		Debt investments-Yoakem bonds
	Date	Account titles			Debit	Credit	Balance
	Apr 1.	Cash			86800		86800
	Oct 1.	Cash				85800	1000
	Oct 1.	Realized loss on debt investments				1000	0
b.	ekkarill92 Next > < Previous Related Solutions On January 1, 2020, Oriole Company purchased 11% bonds, having a maturity value of $328,000 for... On January 1, 2020, Oriole Company purchased 11% bonds, having a maturity value of $328,000 for $353,515.61. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Oriole Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.... On January 1, 2020, Oriole Company makes the two following acquisitions. 1. Purchases land having a... On January 1, 2020, Oriole Company makes the two following acquisitions. 1. Purchases land having a fair value of $150,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $252,759. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $180,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Oriole Company for the two... Exercise 240 On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common... Exercise 240 On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,150,000. The company issued 146,000 shares of common stock at $16 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to stockholders of record on December 31, 2020, payable on January 15, 2021. The market value of Oriole Company stock was $17 per share on... A company who conducts weight management of soda for bars concludes that on average the soda... A company who conducts weight management of soda for bars concludes that on average the soda bottles weigh 12.29 oz . With a sample size of 36 , and standard deviation of weight from those bottles being 0.09 ounces. The same company went on to test the mean weight of 21 soda bottles for grocery stores and concluded that on average the soda bottles weighed 13.10 oz with a standard deviation of 0.13 ounces. With a 10 percent significance level... The condensed financial statements of Oriole Company for the years 2019 and 2020 are presented as... The condensed financial statements of Oriole Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) ORIOLE COMPANY Balance Sheets December 31 2020 2019 Current assets    Cash and cash equivalents $330 $360    Accounts receivable (net) 660 590    Inventory 600 530    Prepaid expenses 120 160      Total current assets 1,710 1,640 Investments 200 200 Property, plant, and equipment 420 380 Intangibles and other assets 530 510      Total assets $2,860 $2,730 Current liabilities $1,090 $980 Long-term liabilities 550 520... Share buybacks are not ethically wrong. Because if the company has sufficient retained earnings and cash,... Share buybacks are not ethically wrong. Because if the company has sufficient retained earnings and cash, but no adequate opportunities to invest, share buybacks are a good way to reward shareholder. Also, the information contained in share buybacks will be processed by the market, and the shares will be priced correctly after taking into consideration all the information, including the share buybacks. Companies don't have any obligations to use the money to grow the company, pay employees more etc instead... On January 1, 2020, Oriole Corporation issued a series of 100 convertible bonds, maturing in 5... On January 1, 2020, Oriole Corporation issued a series of 100 convertible bonds, maturing in 5 years. The face amount of each bond was $500. Oriole received $51,300 for the bond issue. The bonds paid interest every December 31 at 8%; the market interest rate for bonds with a comparable level of risk was 7.80%. The bonds were convertible to common shares at a rate of 10 common shares per bond. Oriole amortized bond premiums and discounts using the effective... Oriole Company started operations on January 1, 2012, and has used the FIFO method of inventory... Oriole Company started operations on January 1, 2012, and has used the FIFO method of inventory valuation since its inception. In 2018, it decides to switch to the average-cost method. You are provided with the following information. Net Income Retained Earnings (Ending Balance) Under FIFO Under Average-Cost Under FIFO 2012 $92,000 $82,800 $90,600 2013 68,300 62,900 158,500 2014 81,300 70,800 255,000 2015 116,500 126,800 308,600 2016 301,400 290,400 644,800 2017 311,300 316,800 731,300 (a) What is the beginning retained earnings... Presented below is the trial balance of Oriole Corporation at December 31, 2020. Debit Credit Cash... Presented below is the trial balance of Oriole Corporation at December 31, 2020. Debit Credit Cash $   199,560 Sales $ 8,103,320 Debt Investments (trading) (at cost, $145,000) 156,320 Cost of Goods Sold 4,800,000 Debt Investments (long-term) 301,560 Equity Investments (long-term) 279,560 Notes Payable (short-term) 93,320 Accounts Payable 458,320 Selling Expenses 2,003,320 Investment Revenue 67,870 Land 263,320 Buildings 1,042,560 Dividends Payable 138,560 Accrued Liabilities 99,320 Accounts Receivable 438,320 Accumulated Depreciation-Buildings 152,000 Allowance for Doubtful Accounts 28,320 Administrative Expenses 904,870 Interest Expense 215,870... Sandhill Company expects to have a cash balance of $69,000 on January 1, 2020. These are... Sandhill Company expects to have a cash balance of $69,000 on January 1, 2020. These are the relevant monthly budget data for the first two months of 2020. 1. Collections from customers: January $106,500, February $219,000. 2. Payments to suppliers: January $60,000, February $112,500. 3. Wages: January $45,000, February $60,000. Wages are paid in the month they are incurred. 4. Administrative expenses: January $31,500, February $36,000. These costs include depreciation of $1,500 per month. All other costs are paid as... ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par... What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and... An investment project costs $20,100 and has annual cash flows of $4,400 for six years.   ... PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following... Draw a DFA for the following ( ∑ = {0,1}):                                 Set of all strings with. In the article from Forbes notes that the goal of a leader is not to clone... Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,... ADVERTISEMENT About @ 2020 WizEdu