Assessing Financial Statement Effects of Trading and Available-for-Sale SecuritiesUse the financial statement effects template to record the following four transactions involving investments in marketable securities.Use negative signs with your answers, when appropriate.Balance SheetTransaction Cash Asset +(1)(2)1. Purchased 6,000 common shares of Liu, Inc., at $11.50 cash per share.2. Received a cash dividend of $1.40 per common share from Liu.3. Year-end market price of Liu common stock is $11.25 per share.4. Sold all 6,000 common shares of Liu for $66,300.(3)TNoncashAssets= Liabilities +ContributedCapital+EarnedCapitalRevenueIncome StatementExpensesNetIncome

The objective of the question is to understand the financial statement effects of trading and…

Answered: Assessing Financial Statement Effects…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Record the appropriate journal entry to reflect the following: The investments that Veggies-R-Us. Inc. currently has in their investment account (current asset) represents investments that were purchased recently. Based upon stock market auotes obtained for December 31, 20XX, the market value of these investments = $112,000. (It is management's intent to actively manage these shares for profit.) You have been provided with the partial Trail Balance for this company below: Veggies-R-Us. Trial Balance (Partial) December 31, 20XX Cash $26,750 (Debit) Accounts Receivable $47,630 (Debit) Allowance for doubtful accounts $250 (Debit) Prepaid rent $1,680 (Debit) Supplies $8,700 (Debit) Investments $113,520 (Debit) Furniture $15,350 (Debit)
Missing Statement Items, Trading Investments JED Capital Inc., makes investments in trading securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are shown in the income statement and balance sheet below: There were no dividends. Determine the missing items. JED Capital Inc. Selected Income Statement Items For the Years Ended December 31, Year 2 and Year 3 Year 2 Year 3 Operating Income Unrealized Gain (Loss) (3,800) Net Income $26,300 Feedback Operating Income-Year 2: Do this after you have calculated requirements (Unrealized Gain (Loss)) and (Net Income). Then subtract (Unrealized Gain (Loss)) from (Net Income). Unrealized Gain (Loss)-Year 2: Year 2 valuation allowance minus Year 1 valuation allowance. Remember when you subtract a negative number the resulting effect is to add the amount. Net Income-Year 2: Year 2 retained earnings minus…
Missing Statement Items, Trading Investments 1. EX.15-01 JED Capital Inc., makes investments in trading securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are 2. EX.15-02 shown in the income statement and balance sheet below: 3. EX.15-03 There were no dividends. Determine the missing items. 4. EX.15-06 JED Capital Inc. 5. EX.15-08.ALGO Selected Income Statement Items 6. EX.15-11.ALGO For the Years Ended December 31, Year 2 and Year 3 Year 2 Year 3 7. EX.15-14.ALGO Operating Income $ Unrealized Gain (Loss) (3,400) Net Income $23,800 JED Capital Inc. Selected Balance Sheet Items December 31, Year 1, Year 2, and Year 3 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Trading Investments, at Cost $209,200 $248,200 $292,500 Valuation Allowance for Trading Investments (10,200) 15,300 Trading Investments, at Fair Value Retained Earnings $246,600 $326,300
Data pertaining to the current position of Forte Company follow:Cash $412,500Marketable securities 187,500Accounts and notes receivable (net) 300,000Inventories 700,000Prepaid expenses 50,000Accounts payable 200,000Notes payable (short-term) 250,000Accrued expenses 300,000 Instructions1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios in parts b through j to one decimal place.2. List the following captions on a sheet of paper:Transaction Working Capital Current Ratio Quick Ratio Compute the working capital, the…
A transaction has been recorded in the T-accounts of Horowitz Corporation as follows: Debit Cash 25,000 A. + B. + C. D. Credit Assets = Liabilities Multiple Choice Which of the following reflects how this event affects the company's financial statements? Balance Sheet O Option C Option D Option B Option A Common Stock + N/A N/A Debit Credit 25,000 N/A Stockholders' Equity N/A + Revenue N/A N/A N/A Income Statement Expense = Net Income Statement of Cash Flows +FA +FA +0A -IA N/A N/A N/A + N/A N/A
Journalizing stock issuances, cash dividends, and stock dividends; preparing stockholders’ equity section of balance sheet This problem continues the Canyon Canoe Company situation from Chapter 12. After looking into debt financing through notes, mortgage, and bonds payable, Canyon Canoe Company derides to raise additional capital for the planned business expansion. The company will be able to acquire cash as well as land adjacent to its current business location. Before the following transactions, the balance in Common Stock on January 1, 2021, was $136,000 and included 136,000 shares of common stock issued and outstanding. (There was no Paid-In Capital in Excess of Par—Common.) Canyon Canoe Company had the following transactions in 2021: Requirements Journalize the transactions. Calculate the balance in Retained Earnings on December 31, 2021. Assume the balance on January 1, 2021 was $4,250 and net income for the year was $417,000. Prepare the stockholders’ equity section of the…
"Page 1 6 Record the necessary journal entry for the issuance of common stock. General Journal DR CR 7 Record the repurchase of common stock. General Journal DR CR 8 Record $50,000 in cash dividends declared. General Journal DR CR 9 Record the $50,000 cash dividends that have now been paid. General Journal DR CR 10 Assume and record a property dividend of inventory valued at $75,000 declared and paid. General Journal DR CR 11 Assume a common stock dividend declared of 19% of shares outstanding. Market at $12 per share. General Journal DR CR 12 Assume a common stock dividend declared of 35% of shares outstanding. General Journal DR CR
Seven metrics The following data were taken from the financial statements of Woodwork Enterprises Inc. for the current fiscal year. Assuming that there are no intangible assets. Property, plant, and equipment (net) Liabilities: Current liabilities Mortgage note payable, 10%, ten-year note issued two years ago Total liabilities Stockholders' equity: Preferred $2 stock, $100 par (no change during year) Common stock, $10 par (no change during year) Retained earnings: Balance, beginning of year Net income Preferred dividends Common dividends Balance, end of year Total stockholders' equity Sales Check My Work $1,440,000 566,000 $27,000 179,000 $225,000 1,125,000 $2,006,000 206,000 $1,800,000 $1,350,000 $1,350,000 1,350,000 1,800,000 $4,500,000 $13,614,650 Previous
Sheridan Company provides you with the following condensed balance sheet information: Current assets Equity investments Equipment (net) Intangibles Total assets Current and long-term liabilities Stockholders' equity Common stock ($5 par) Paid-in capital in excess of par Retained earnings Total liabilities and stockholders' equity (1) (2) (3) (4) Liabilities and Stockholders' Equity (5) Assets Total assets For each of the following transactions, indicate the dollar impact (if any) on the following five items: (1) total assets, (2) common stock, (3) paid-in capital in excess of par, (4) retained earnings, and (5) stockholders' equity. (Each situation is independent.) a. Sheridan declares and pays a $0.50 per share cash dividend. Common stock Paid-in capital in excess of par Retained earnings $20,200 Total stockholders' equity 120,300 154,200 decrease no effect no effect decrease decrease < $41,300 < 59,400 248,300 55,000 $404,000 $109,300 294,700 $404,000 $ LA tA LA LA
Equity method journal entries (price equals book value) Prepare journal entries for the transactions below relating to an Equity Investment accounted for using the equity method. a. An investor purchases 14,400 common shares of an investee at $16 per share; the shares represent 25% ownership in the investee and the investor concludes that it can exert significant influence over the investee. b. The investee reports net income of $172,800. c. The investor receives a cash dividend of $1.50 per common share from the investee. d. The investor sells all 14,400 common shares of the investee for $260,280. General Journal Ref. Description Debit Credit a. b. C. d. Equity investment
Gympa reported on its income statement a net income $647,000 for the year ended December 31 before considering the following: a. During the year, Gympa purchased trading securities b. At year-end , the fair value of the investment portfolio was $50,000 lesshan the cost c. The balance of Retained Earnings was $792,000 on January 1 d. Gympa paid $67,000 in cash dividends during the year. Using the above data, calculate the balance of Retained Earnings on Decemeber 31.
Financial statements for Rundle Company follow. Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable Other Total noncurrent liabilities. Total liabilities Stockholders' equity. Preferred stock, (par value $10, 4% cumulative, non-participating; 7,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Revenues Sales (net) Other revenues RUNDLE COMPANY Statements of Income and Retained Earnings For the Years Ended December 31 Total revenues Expenses Cost of goods sold RUNDLE COMPANY Balance Sheets As of December 31 Selling, general, and administrative Interest expense…

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