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P16.5 (LO 2, 3), AP Financial Statement Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations. 1,000 shares of Willhite Corporation common stock 1,400 shares of Hutcherson Corporation common stock 1,200 shares of Downing Corporation preferred stock Cost $52,000 84,000 33,600 On December 31, the total cost of the portfolio equaled the total fair value. Frederick had the following transactions related to the securities during 2022. Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. Feb. 28 Purchased 400 shares of $10 par value common stock of Liggett Corporation at $78 per share. 30 Received a cash dividend of $1.15 per share on Hutcherson Corp. common stock. 8 Received cash dividends of $0.40 per share on Downing Corp. preferred stock. 18 Sold all 1,200 shares of Downing Corp. preferred stock at $27 per share. July 30 Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. Dec. 1 Received a cash dividend of $1.50 per share on Liggett Corporation common stock. At December 31, 2022, the fair values of the securities were: Hutcherson Corporation common stock $64 per share Liggett Corporation common stock $72 per share Instructions a. Prepare journal entries to record the transactions. a. Loss on sale of stock investment $1,200 b. Post to the investment alcount. (Use a T-account.) c. Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value. c. Unrealized gain or loss-income $5,800 d. Show the balance sheet presentation at December 31, 2022, for the investment-related accounts. Prepare a balance sheet.

P16.5 (LO 2, 3), AP Financial Statement Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations. 1,000 shares of Willhite Corporation common stock 1,400 shares of Hutcherson Corporation common stock 1,200 shares of Downing Corporation preferred stock Cost $52,000 84,000 33,600 On December 31, the total cost of the portfolio equaled the total fair value. Frederick had the following transactions related to the securities during 2022. Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. Feb. 28 Purchased 400 shares of $10 par value common stock of Liggett Corporation at $78 per share. 30 Received a cash dividend of $1.15 per share on Hutcherson Corp. common stock. 8 Received cash dividends of $0.40 per share on Downing Corp. preferred stock. 18 Sold all 1,200 shares of Downing Corp. preferred stock at $27 per share. July 30 Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. Dec. 1 Received a cash dividend of $1.50 per share on Liggett Corporation common stock. At December 31, 2022, the fair values of the securities were: Hutcherson Corporation common stock $64 per share Liggett Corporation common stock $72 per share Instructions a. Prepare journal entries to record the transactions. a. Loss on sale of stock investment $1,200 b. Post to the investment alcount. (Use a T-account.) c. Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value. c. Unrealized gain or loss-income $5,800 d. Show the balance sheet presentation at December 31, 2022, for the investment-related accounts. Prepare a balance sheet.

FINANCIAL ACCOUNTING
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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P16.5 (LO 2, 3), AP Financial Statement Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations. 1,000 shares of Willhite Corporation common stock 1,400 shares of Hutcherson Corporation common stock 1,200 shares of Downing Corporation preferred stock Cost $52,000 84,000 33,600 On December 31, the total cost of the portfolio equaled the total fair value. Frederick had the following transactions related to the securities during 2022. Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. Feb. 28 Purchased 400 shares of $10 par value common stock of Liggett Corporation at $78 per share. 30 Received a cash dividend of $1.15 per share on Hutcherson Corp. common stock. 8 Received cash dividends of $0.40 per share on Downing Corp. preferred stock. 18 Sold all 1,200 shares of Downing Corp. preferred stock at $27 per share. July 30 Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. Dec. 1 Received a cash dividend of $1.50 per share on Liggett Corporation common stock. At December 31, 2022, the fair values of the securities were: Hutcherson Corporation common stock $64 per share Liggett Corporation common stock $72 per share Instructions a. Prepare journal entries to record the transactions. a. Loss on sale of stock investment $1,200 b. Post to the investment alcount. (Use a T-account.) c. Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value. c. Unrealized gain or loss-income $5,800 d. Show the balance sheet presentation at December 31, 2022, for the investment-related accounts. Prepare a balance sheet.
Transcribed Image Text:P16.5 (LO 2, 3), AP Financial Statement Here is Frederick Company's portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations. 1,000 shares of Willhite Corporation common stock 1,400 shares of Hutcherson Corporation common stock 1,200 shares of Downing Corporation preferred stock Cost $52,000 84,000 33,600 On December 31, the total cost of the portfolio equaled the total fair value. Frederick had the following transactions related to the securities during 2022. Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. Feb. 28 Purchased 400 shares of $10 par value common stock of Liggett Corporation at $78 per share. 30 Received a cash dividend of $1.15 per share on Hutcherson Corp. common stock. 8 Received cash dividends of $0.40 per share on Downing Corp. preferred stock. 18 Sold all 1,200 shares of Downing Corp. preferred stock at $27 per share. July 30 Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. Dec. 1 Received a cash dividend of $1.50 per share on Liggett Corporation common stock. At December 31, 2022, the fair values of the securities were: Hutcherson Corporation common stock $64 per share Liggett Corporation common stock $72 per share Instructions a. Prepare journal entries to record the transactions. a. Loss on sale of stock investment $1,200 b. Post to the investment alcount. (Use a T-account.) c. Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value. c. Unrealized gain or loss-income $5,800 d. Show the balance sheet presentation at December 31, 2022, for the investment-related accounts. Prepare a balance sheet.
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