Chapter 15, Problem 15.4APR

Investment reporting

O'Brien Industries Inc. is a hook publisher. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 follow. Selected missing balances are shown by letters.

ÓBrien Industries Inc. Balance Sheet December 31, Year 2 and Year 1
	Dec. 31, Year 2	Dec 31, Year 1
cash	$233,000	$220,000
Accounts receivable (net)	136,530	138,000
Available for sale investments (at cost)—Note 1	$ a	$103,770
Less valuation allowance for available-for-sale investments	b.	2,500
Available for-sale investments (fair value)	$ c	$101,270
Interest receivable	$ d	—
Investment in Jolly Roger Co. stock—Note 2	e.	$ 77,000
Office equipment (net)	115,000	130,000
Total assets	$ f.	$666,270
Accounts payable	$ 69.400	$ 65,000
Common stock	70.000	70,000
Excess of issue price over par	225,000	225,000
Retained earnings	g	308,770
Unrealized gain (loss) on available for-sale investments	h.	(2,500)
Total liabilities and Stockholders’ equity	$ i.	$666,270

Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows:

	No. of Shares	Cost per Share	Total Cost	Total Fair Value
Bernard Co. stock	2,250	$17	$ 38,250	$ 37,500
Chadwick Co. stock	1,260	52	65,520	63,770
			$103,770	$101,270

Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding .shares of Jolly Roger Co.

The following selected investment transactions occurred during Year 2:

May 5.	Purchased 3,080 shares of Gozar Inc. at $30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security.
Oct. 1.	Purchased $40,000 of Nightline co. 6%, 10-Year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1.
9.	Dividends of $12,500 are received on the Jolly Roger co. investment.
Dec. 31	Jolly Roger co. reported a total net income of $112,000 for year 2. O'Brien industries Inc. recorded equity earnings for its share of Jolly Roger co. net income.
31.	Accrued three months of interest on the Nightline bonds.
31.	Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts:

Available-for-Sale Investments	Fair Value
Bernard Co. stock	$15,40 per share
Chadwick Co. stock	$46,00 per share
Gozar Inc. stock	$32,00 per share
Nightline Co. bonds	$98 per $ 100 of face amount

Dec. 31. Closed the O’Brien Industries Inc. net income of $146,230. O'Brien Industries Inc. paid no dividends during the year.

Instructions

Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.