Question
In: Accounting
Review the following? long-term, available-for-sale security transactions of Roya Department? Stores: a. Purchased 460 shares of...
Review the following? long-term, available-for-sale security transactions of Roya Department? Stores:
a. Purchased 460 shares of Potter Fine Foods common stock at $ 32 per? share, with the intent of holding the stock for the indefinite future.
b. Received a cash dividend of $ 1.60 per share on the Potter Fine Foods investment.
c. At? year-end, adjusted the investment account to fair value of $ 39 per share.
d. Sold the Potter Fine Foods stock for the price of $ 20 per share.
Requirement
Journalize the? long-term, available-for-sale security transactions of Roya Department Stores.
(accounts to choose from in a-d are Allowance to adjust investment in AFSS to market, Cash, Dividend revenue, Gain on sale of investment in AFSS, investment in AFSS, Loss on Sale of investment in AFSS, Unrealized gain on investment in AFSS, and Unrealized loss on investment in AFSS)
a) Purchased 460 shares of Potter Fine Foods common stock at $32 per? share, with the intent of holding the stock for the indefinite future. ?(Abbreviation used:? AFSS, Available-for-sale securities. The company uses an allowance account to adjust available for sale investments to fair value. Record debits? first, then credits)
b) Received a cash dividend of $1.60 per share on the Potter Fine Foods investment.
c) At? year-end, adjusted the investment account to fair value of $39 per share.
d)Sold the Potter Fine Foods stock for the price of $20 per share.
-?First, prepare the journal entry to record any necessary eliminations.?
-Then journalize the sale.
Solutions
Expert Solution
| Transaction | Account description | Debit | Credit |
| a | Investment in AFSS | $ 14,720 | |
| Cash | $ 14,720 | ||
| (To record Purchase of shares) |
| Transaction | Account description | Debit | Credit |
| b | Cash | $ 736 | |
| Dividend revenue | $ 736 | ||
| (To record Dividend Revenue) | |||
| 1.60*460 = 736 | |||
| Transaction | Account description | Debit | Credit |
| c | Investment in AFSS | $ 3,220 | |
| Allowance to adjust investment in AFSS to market | $ 3,220 | ||
| (To record the market value adjustments) | |||
| (39-32)*460 | |||
| Transaction | Account description | Debit | Credit |
| d | Allowance to adjust investment in AFSS to market | $ 3,220 | |
| Investment in AFSS | $ 3,220 | ||
| (To reverse the Market Value Adjustment) | |||
| d | Cash | $ 9,200 | |
| Loss on Sale of investment in AFSS | $ 5,520 | ||
| Investment in AFSS | $ 14,720 | ||
| (To record sale of investment) | |||
| (20*460= 9220)(12*460= 5520) | |||
Dear Student,
Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.
ekkarill92 answered 1 year agoRelated Solutions
The following transactions for Wolfe Corporation relate to long-term bonds classified as available-for-sale: 2018 Jan. 1...
The following transactions for Wolfe Corporation relate to
long-term bonds classified as available-for-sale:
2018
Jan. 1 Purchased $50,000 Lake Corporation 10% bonds for
$50,000.
July 1 Received interest on Lake bonds.
Dec. 31 Accrued interest on Lake bonds.
Dec. 31 Market value of the bonds $55,000, prepare the
adjusting entry to record bonds at market value.
2019
Jan. 1 Received interest on Lake bonds.
Jan. 1 Sold $25,000 Lake bonds for $26,650.
July 1 Received interest on Lake bonds.
a)...
Stoll Co.’s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost...
Stoll Co.’s long-term available-for-sale portfolio at December
31, 2016, consists of the following.
Available-for-Sale
Securities
Cost
Fair Value
80,000 shares of Company A
common stock
$
1,070,600
$
980,000
14,000 shares of Company B
common stock
318,750
308,000
35,000 shares of Company C
common stock
1,325,500
1,281,875
Stoll enters into the following long-term investment
transactions during year 2017.
Jan.
29
Sold 7,000 shares of Company B
common stock for $158,375 less a brokerage fee of $3,100.
Apr.
17
Purchased 20,000...
Stoll Co.’s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost...
Stoll Co.’s long-term available-for-sale portfolio at December
31, 2016, consists of the following.
Available-for-Sale Securities
Cost
Fair Value
80,000 shares of Company A common stock
$
1,039,600
$
920,000
28,000 shares of Company B common stock
338,750
328,000
34,000 shares of Company C common stock
1,360,500
1,311,875
Stoll enters into the following long-term investment
transactions during year 2017.
Jan.
29
Sold 14,000 shares of Company B common stock for $168,375 less
a brokerage fee of $3,400.
Apr.
17
Purchased 21,000...
Stoll Co.’s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost...
Stoll Co.’s long-term available-for-sale portfolio at December
31, 2016, consists of the following. Available-for-Sale Securities
Cost Fair Value 70,000 shares of Company A common stock $ 1,046,600
$ 915,000 42,000 shares of Company B common stock 352,750 342,000
41,000 shares of Company C common stock 1,385,000 1,332,875 Stoll
enters into the following long-term investment transactions during
year 2017. Jan. 29 Sold 21,000 shares of Company B common stock for
$175,375 less a brokerage fee of $3,200. Apr. 17 Purchased 22,000...
Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.
Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.
Year 1
Jan.
20
Purchased Johnson & Johnson bonds for $29,500.
Feb.
9
Purchased notes of Sony for $63,540.
June
12
Purchased bonds of Mattel for $49,500.
Dec.
31
Fair values for debt in the portfolio are Johnson & Johnson, $32,300; Sony, $55,750; and Mattel, $57,850.
Year 2...
Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.
Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.Year 1
Jan.
20
Purchased Johnson & Johnson bonds for $26,000.
Feb.
9
Purchased notes of Sony for $60,390.
June
12
Purchased bonds of Mattel for $46,000.
Dec.
31
Fair values for debt in the portfolio are Johnson & Johnson, $30,100; Sony, $49,650; and Mattel, $54,850.
Year 2
Apr....
The following securities are in Frederick Company’s portfolio of long-term available-for-sale securities at December 31, 2017.
The following securities are in Frederick Company’s portfolio of long-term available-for-sale securities at December 31, 2017.
Cost
1,000 shares of Willhite Corporation common stock.............................$52,000
1,400...
The following are in DEF Company’s portfolio of long-term available-for-sale securities at December 31, 2018. Total...
The following are in DEF Company’s portfolio of long-term
available-for-sale
securities at December 31, 2018.
Total Cost
500 shares of Bein Corporation common
stock $26,000
700 shares of Prust Corporation common
stock 42,000
600 shares of Gold Corporation preferred
stock 16,800
On December 31, the total cost of the portfolio equaled total
fair value. DEF Company had
the following transactions related to the securities during
2019.
Jan. 7: Sold 500 shares of Bein Corporation common stock at $56
per share.
Jan. 10: Purchased...
1. Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available-for-sale debt securities.
Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.Year 1
Jan.
20
Purchased Johnson & Johnson bonds for $26,000.
Feb.
9
Purchased notes of Sony for $60,390.
June
12
Purchased bonds of Mattel for $46,000.
Dec.
31
Fair values for debt in the portfolio are Johnson & Johnson, $30,100; Sony, $49,650; and Mattel, $54,850.
Year 2
Apr....
A. If you treated a trading security like a available for sale security by accident in...
A. If you treated a trading security like a available for sale
security by accident in the accounting records, what would be the
effect on 1) Net income 2) retained earnings 3) stockholder's
equity after one year and then two years. B. If you treated an
available for sale security like a trading security by accident in
the accounting records, what would be the effect on 1) Net income
2) Retained earnings 3) stockholder's equity after one year and
then...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Write a c++ program to load two column of numbers, do arithmetic operations to the data...
- A forklift can be leased for $3000 per month, with maintenance and insurance included. Alternatively, the...
- Assume that I can borrow money at a rate of 10% per year, but that I...
- The newly elected president Susan implements some policies with the intention of boosting income. She succeeds...
- Multiple Production Department Factory Overhead Rates The total factory overhead for Urban Styles, Inc. is budgeted...
- using this code under, I want when the user input only letter q an error message...
- 1. Keeping in mind the various definitions of operating system, consider whether the operating system should...
ADVERTISEMENT