Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 880 $45,936 Pavlov Co. 2,380 64,736 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $62 per share and the Pavlov Co. stock had a market value of $49 per share. Galileo Company had net income of $355,300 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 880 $45,936 Pavlov Co. 2,380 64,736 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $62 per share and the Pavlov Co. stock had a market value of $49 per share. Galileo Company had net income of $355,300 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Balance Sheet Presentation of Available-for-Sale Investments
During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows:
Security
Shares Purchased
Cost
Hawking Inc.
880
$45,936
Pavlov Co.
2,380
64,736
Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $62 per share and the Pavlov Co. stock had a market value of $49 per share. Galileo Company had net income of
$355,300 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets.
a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.
Galileo Company
Balance Sheet (selected items)
December 31, Year 1
Assets
Current Assets:
b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
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