On November 1, 2020, Drucker Co. acquired the following investments in equity securities measured at FV‑NI. Kelly Corporation—750 shares of common stock (no-par) at $60 per share. Keefe Corporation—450 shares preferred stock ($10 par) at $20 per share. On December 31, 2020, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for 2021. Mar. 2, 2021 Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50. Oct. 1, 2021 Sold 150 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31, 2021 Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. for 2021 d. Prepare the entries required in 2021 to record dividend revenue, the sale of stock, and the fair value adjustment. Update the Fair Value Adjustment account prior to recording any sale. Eliminate the associated Fair Value Adjustment account upon recording the sale of any investment. Note: List multiple debits or credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Mar. 2, 2021 Oct. 1, 2021 Oct. 1, 2021 Dec. 31, 2021 e. Indicate items and amounts that should be reported on the 2021 income statement and year-end balance sheet. Note: Use a negative sign to indicate a loss. Income Statement 2021 Other Revenues and Gains Dividend revenue Answer Net gain (loss) on equity securities Answer Balance Sheet, December 31 2021 Assets Investment in equity securities Answer

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 84PSB: Statement of Stockholders' Equity At the end of 2019, Stanley Utilities Inc. had the following...

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On November 1, 2020, Drucker Co. acquired the following investments in equity securities measured at FV‑NI.

Kelly Corporation—750 shares of common stock (no-par) at $60 per share. Keefe Corporation—450 shares preferred stock ($10 par) at $20 per share. On December 31, 2020, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for 2021.

Mar. 2, 2021 Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.
Oct. 1, 2021 Sold 150 shares of Keefe Corporation preferred stock at $25 per share.
Dec. 31, 2021 Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share.

for 2021

d. Prepare the entries required in 2021 to record dividend revenue, the sale of stock, and the fair value adjustment. Update the Fair Value Adjustment account prior to recording any sale. Eliminate the associated Fair Value Adjustment account upon recording the sale of any investment.

Note: List multiple debits or credits (when applicable) in alphabetical order.

Date	Account Name	Dr.	Cr.
Mar. 2, 2021

Oct. 1, 2021


Oct. 1, 2021



Dec. 31, 2021

e. Indicate items and amounts that should be reported on the 2021 income statement and year-end balance sheet.
Note: Use a negative sign to indicate a loss.

Income Statement	2021
Other Revenues and Gains
Dividend revenue	Answer
Net gain (loss) on equity securities	Answer

Balance Sheet, December 31	2021
Assets
Investment in equity securities	Answer

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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