GL1501 - Based on Problem 15-4A LO P4 Twist Corp. had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.   Apr.   16   Purchased 5,000 shares of Lafayette Co. stock at $26 per share. July   7   Purchased 3,500 shares of CVF Co. stock at $51 per share.     20   Purchased 1,600 shares of Green Co. stock at $18 per share. Aug.   15   Received an $1.20 per share cash dividend on the Lafayette Co. stock.     28   Sold 3,000 shares of Lafayette Co. stock at $29 per share. Oct.   1   Received a $3.30 per share cash dividend on the CVF Co. shares. Dec.   15   Received a $1.40 per share cash dividend on the remaining Lafayette Co. shares.     31   Received a $2.70 per share cash dividend on the CVF Co. shares.

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Chapter15: Financial Statement Analysis
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GL1501 - Based on Problem 15-4A LO P4

Twist Corp. had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
 
Apr.   16   Purchased 5,000 shares of Lafayette Co. stock at $26 per share.
July   7   Purchased 3,500 shares of CVF Co. stock at $51 per share.
    20   Purchased 1,600 shares of Green Co. stock at $18 per share.
Aug.   15   Received an $1.20 per share cash dividend on the Lafayette Co. stock.
    28   Sold 3,000 shares of Lafayette Co. stock at $29 per share.
Oct.   1   Received a $3.30 per share cash dividend on the CVF Co. shares.
Dec.   15   Received a $1.40 per share cash dividend on the remaining Lafayette Co. shares.
    31   Received a $2.70 per share cash dividend on the CVF Co. shares.
The table below represents the year-end investment values for a portfolio. It is divided into two main sections: "Cost of investments at December 31" and "Fair value of investments at December 31." Each section includes columns for different companies, the number of shares, and their respective costs or fair values.

### Cost of Investments at December 31:
- **Lafayette Company stock**: Cost is $52,000
- **CVF Co. stock**: Cost is $178,500
- **Green Co.**: Cost is $28,800
- **Total cost**: $259,300

### Fair Value of Investments at December 31:
This section provides fields to fill in the number of shares, the fair value per share, and the total fair value for each investment category.

Note: The specific fair values per share provided in the prompt are:
- Lafayette Co.: $27.00
- CVF Co.: $49.50
- Green Co.: $15.00

### Total Unrealized Gain/Loss as of December 31:
This field will calculate the difference between the total cost and total fair value.

### Steps to Adjust Fair Value:
1. **Step 1**: Determine what the unadjusted balance in the fair value adjustment equals.
2. **Step 2**: Determine what the adjusted balance in the fair value adjustment account should equal.

The information and steps help calculate the total cost and total fair value of the available-for-sale portfolio as of December 31, and guide the necessary year-end adjustments.
Transcribed Image Text:The table below represents the year-end investment values for a portfolio. It is divided into two main sections: "Cost of investments at December 31" and "Fair value of investments at December 31." Each section includes columns for different companies, the number of shares, and their respective costs or fair values. ### Cost of Investments at December 31: - **Lafayette Company stock**: Cost is $52,000 - **CVF Co. stock**: Cost is $178,500 - **Green Co.**: Cost is $28,800 - **Total cost**: $259,300 ### Fair Value of Investments at December 31: This section provides fields to fill in the number of shares, the fair value per share, and the total fair value for each investment category. Note: The specific fair values per share provided in the prompt are: - Lafayette Co.: $27.00 - CVF Co.: $49.50 - Green Co.: $15.00 ### Total Unrealized Gain/Loss as of December 31: This field will calculate the difference between the total cost and total fair value. ### Steps to Adjust Fair Value: 1. **Step 1**: Determine what the unadjusted balance in the fair value adjustment equals. 2. **Step 2**: Determine what the adjusted balance in the fair value adjustment account should equal. The information and steps help calculate the total cost and total fair value of the available-for-sale portfolio as of December 31, and guide the necessary year-end adjustments.
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