In 2005, KZF Inc. purchased stock as follows;a. Acquired 2,000 shares of Gallery Arts Corp. common stock (par value $20) in exchange for 1,200 shares of KZF Inc. preferred stock (par value $30). The preferred stock had a market value of $75 per share on the date of the exchange.;b. Purchased 800 shares of Champion Corp. common stock (par value $10) at $70 per share, plus a brokerage fee of $800.;At December 31,2005, the market values of the securities were as follows;Security Market Value;KZF Inc $ 71;Gallery Arts Corp 41;Champion Corp. 72;The investments in common stock are classified by KZF Inc. as available-for-sale securities accounted for by the cost method. The fiscal year of KZF ends on December 31.;Required;1. Prepare all entries relating to the investments in common stock for 2005;2. Prepare the entry to record the sale of 200 shares of Champion Corp. common stock on January 15,2006, at $74 per share.;3. Prepare the entry to reclassify the remaining 600 shares of Champion Corp. common stock from available-for sale securities to trading securities on January 31, 2006. The stock was selling at $67 per share on that date.
Paper#25558 | Written in 18-Jul-2015Price : $37