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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 for Slip Systems.
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
Fundamental Accounting Principles
- Financial Accountingarrow_forwardSub. general Account. Answer. Asap.arrow_forwardOn July 1, 2022, Burrough Company acquired 136,000 of the outstanding shares of Carter Company for $15 per share. This acquisition gave Burrough a 25 percent ownership of Carter and allowed Burrough to significantly influence the investee's decisions. As of July 1, 2022, the investee had assets with a book value of $7 million and liabilities of $456,800. At the time, Carter held equipment appraised at $319,200 more than book value; it was considered to have a seven-year remaining life with no salvage value. Carter also held a copyright with a five-year remaining life on its books that was undervalued by $980,000. Any remaining excess cost was attributable to an indefinite-lived trademark. Depreciation and amortization are computed using the straight-line method. Burrough applies the equity method for its investment in Carter. Carter's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Carter's income, earned evenly throughout each year, was $579,000…arrow_forward
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