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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

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

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions