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Requirement 1:
Concept Introduction:
Available for Sale Securities:
These are those equity and debt securities which are not categorized as held-to-maturity or trading securities. They are purchased by the organization for dividend income, interest income or gain from increasing fair value of these securities.
Journalize the transaction:
Any financial transactions entered into by an organization are first entered into the journals via dual entry system to account for a debit and credit transaction. Double bookkeeping system envisages that each transaction has dual effect on company accounts and every transaction is recorded to account for these effects.
To journalize the entries for recording the transaction of Rose Co.
Requirement 2:
The year-end financial statements of the company reflect the fair value of the available securities of the company as on date.
A table showing year end cost and fair value of the short term stock investments of the company.
Requirement 3:
At the end of the year, the
Year end adjustment entry to record the year-end fair value of the short-term stock investments.
Requirement 4:
The
Requirement 5
The effect of short term investment in the income statement and balance sheet for an organization.
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Chapter 15 Solutions
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