Corporate Financial Accounting
14th Edition
ISBN: 9781305887510
Author: WARREN
Publisher: Cengage
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Chapter D, Problem D.14EX
During 20Y8, its first year of operations, Galileo Company purchased two available-for-sale investments as follows:
| Security | Shares Purchased | Cost |
| Hawking Inc | 900 | $44,000 |
| Pavlov Co. | 1,780 | 38,000 |
Assume that as of December 51, 20Y8, the Hawking Inc. stock had a market value of $50 pc-r share, and the Pavlov Co. stock had a market value of $24 per share. Galileo Company had net income of $300,000 and paid no dividends for the year ended December 31, 20Y8. All of the available-for-sale investments are classified as current assets.
- A. Prepare the current assets section of the balance sheet presentation for the available- for-sale investments.
- B. Prepare the
stockholders' equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
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Corporate Financial Accounting
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