WORKING PAPERS F/ FUND ACCOUNTING
WORKING PAPERS F/ FUND ACCOUNTING
22nd Edition
ISBN: 9781308868394
Author: Wild
Publisher: MCG CUSTOM
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Chapter 15, Problem 5E
To determine

Introduction:

Securities which do not fall under the category of trading securities or the held to maturity securities are termed as AFS (Available for Sales) securities. The main reason behind buying these is to augment the market value or capitulating interests and dividend. They are called long term investments when they are held for longer durations while if bought for selling in a short period of time, they are called short term investments.

To calculate:

To prepare the journal entries to record the below short term securities investments of Krum Company that happened in 2015.

  1. $450000 cash paid on August 1 to purchase Houtte’s 9% debt securities dated 30 July, 2015 and maturing January 30, 2016.
  2. A check received on 30th October from Houtte for 90 days interest on the debt securities purchased.

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Brown Company estimates that monthly sales will be as follows. January $100,000 February 150,000 March 180,000   Historical trends indicate that 40 percent of sales are collected during the month of sale, 50 percent are collected in the month following the sale, and 10 percent are collected two months after the sale. Brown's accounts receivable balance as of December 31 totals $80,000 ($72,000 from December's sales and $8,000 from November's sales). The amount of cash Brown can expect to collect during the month of January is?
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Chapter 15 Solutions

WORKING PAPERS F/ FUND ACCOUNTING

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