Record each of the investment transactions.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Boca Inc. Balance Sheets December 31 Assets Cash Accounts Receivable Inventory Prepaid Expenses 2022 2021 110,800 48,400 38,000 87,800 112,500 102,850 26,000 28,400 Long-term investments 109,000 138,000 Plant Assets 397,000 242,500 Accumulated depreciation 50,000 52,000 Total 743,300 595.950 Liabilities and Stockholders' Equity Accounts Payable 72,000 67,300 Accrued Expenses Payable 13,500 21,000 Dividends Payable 3,000 Bonds Payable Common Stock 170,000 146,000 262,000 175,000 Retained Earnings Total 222.800 186.650 243,300 595.950 Additional Information: 1. Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash. 2. A new plant asset was purchased directly in exchange for common stock valued at $42,000. 3. New bonds were issued at par for $60,000. 4. 2022 Net income was $154,480. 5. A $1,000 prior period adjustment was recorded in 2021 correcting an understatement of depreciation in 2019. The 2021 balance sheet is…

Please explain the solution to this general accounting problem with accurate explanations.

Nathan Industries applies overhead using a normal costing approach based on direct labor-hours. The budgeted factory overhead was $480,000, and the budgeted direct labor-hours were 12,000. The actual factory overhead was $492,500, and the actual direct labor-hours were 12,750. How much overhead would be applied to production?

Answer 2

Question

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Answer 6

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

Answer 7

Chapter D, Problem 1PB

(1)

To determine

Record each of the investment transactions.

Answer 8

(1)

Expert Solution

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Prepare the journal entries for each of these transactions.

Date	Account title and explanation	Post ref.	Debit $	Credit $
February 2	Investments		52,500
	Cash			52,500
	(To record the purchase of common stock)

February 4	Investments		19,200
	Cash			19,200
	(To record the purchase of preferred stock)

July 15	Cash		16,000
	Investments			14,000
	Gain (difference amount)			2,000
	(To record the sale of common stock)

November 30	Cash		2,290
	Dividend revenue			2,290
	(To record the dividend revenue)

December 31	Unrealized Holding gain (other comprehensive income)		5,600
	Investments			5,600
	(To record the adjusted fair value of the common and preferred stock)

Table (1)

Common stocked purchased:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $52,500(1,500 shares × $35 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $52,500.

Purchase of preferred stock:

Investments are the assets. Purchase of the common stock increases the investments. Thus, investments are debited with $19,200(600 shares × $32 per share).
Cash is a current asset. Purchase of common stock decreases the cash balance. Thus, cash is credited with $19,200.

Common stock sold @ $40 per share:

Cash is a current asset. Sale of common stock increases the cash balance. Thus, cash is debited with $16,000(400 shares × $40 per share).
Investments are the assets. Sale of the common stock decreases the investments. Thus, investments are credited with $14,000(400 shares × $35 per share).
Gain is a component of owners’ equity. Loss decreases the owners’ equity. Thus, gain is credited with $2,000.

Dividend received:

Cash is a current asset. Dividend revenue increases the cash balance. Thus, cash is debited with $2,290[(1,100 shares × $1.1 per share) + (600 shares × $1.8 per share)].
Dividend revenue is a component of owners’ equity. Dividend revenue increases the owners’ equity. Thus, dividend revenue is credited with $2,290.

Fair value adjustment:

Investments are the assets. Changes (increase) in the fair value of the common stock and preferred stock increases the investments. Thus, investments are debited with $5,600[(1,100 shares × $(35 − 31) per share) + (600 shares × $(32 − 30) per share)].
Unrealized Holding gain is a component of other comprehensive income. It increases the balance of the other comprehensive income. Thus, unrealized Holding gain (other comprehensive income) is credited with $5,600[$4,400 + $1,200].

Answer 9

(1)

Expert Solution

Answer 10

(1)

Expert Solution

Answer 11

Expert Solution

Answer 12

(2)

To determine

Calculate the balance in the Investments account as of December 31.

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares

Table (2)

Answer 13

(2)

To determine

Calculate the balance in the Investments account as of December 31.

Answer 14

(2)

Expert Solution

Answer to Problem 1PB

The balance in the investment account as of December 31 is $52,100($34,100 + $18,000).

Answer 15

(2)

Expert Solution

Answer 16

(2)

Expert Solution

Answer 17

Expert Solution

Answer 18

Explanation of Solution

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Calculate the balance in the investment account as of December 31.

Particulars	Common stock	Preferred stock
Investments purchased	$52,500	$19,200
Less: sale of common stock	(14,000)
Less: fair value adjustment	(4,400)	(1,200)
Investments as of December 31	34,100	18,000
Number of shares	1,100shares	600 shares