Details of this Paper

Securities transactions_ seven questions

Description

solution


Question

Question;QS 15-1 Describing;investments in securities L.O. C1, C2;Complete;the following descriptions by selecting the appropriate option.;1.;Accrual of interest on bonds held as long-term investments requires a credit to.;2.;The;controlling investor (more than 50% ownership) is called the, and the investee;company is called the.;3.;Trading securities are classified as assets.;4.;Equity securities giving an investor significant influence are accounted for;using the.;5.;Available-for-sale debt securities are reported on the balance sheet at.;QS;15-2 Identifying long-term investments L.O. C1;Which;of the following statements are true of long-term investments? (Select True if;the statement is true or False if the statement is not true.);a.;They can include investments in trading securities.;b. They;are always easily sold and therefore qualify as being marketable.;c.;They can include debt and equity securities available-for-sale.;d.;They are held as an investment of cash available for current operations.;e.;They can include debt securities held-to-maturity.;f.;They can include bonds and stocks not intended to serve as a ready source of;cash.;g.;They can include funds earmarked for a special purpose, such as bond sinking;funds.;QS;15-3 Short-term equity investments L.O. P1;On;April 18, Dice Co. made a short-term investment in 500 common shares of XLT Co.;The purchase price is $45 per share and the broker?s fee is $150. The intent is;to actively manage these shares for profit. On May 30, Dice Co. receives $1 per;share from XLT in dividends.;Prepare;the April 18 and May 30 journal entries to record these transactions. (Omit the;$" sign in your response.);Date;General Journal Debit Credit;Apr.;18;May 30;QS;15-4 Available-for-sale securities L.O. P3;Fender;Co. purchased short-term investments in available-for-sale securities at a cost;of $100,000 on November 25, 2011. At December 31, 2011, these securities had a;fair value of $94,000. This is the first and only time the company has;purchased such securities.;1.;Prepare;the December 31, 2011, year-end adjusting entry for the securities? portfolio.;(Omit the "$" sign in your response.);Date;General Journal Debit Credit;Dec.31;2011;3.;Prepare;the April 6, 2012, entry when Fender sells one-half of these securities for;$52,000. (Omit the "$" sign in your response.);Date;General Journal Debit Credit;Apr.;6, 2012;QS;15-5 Available-for-sale securities L.O. P3;May 7;Purchases;100 shares of Lov stock as a short-term investment in available-for-sale;securities at a cost of $25 per share plus $200 in broker fees.;June 6;Sells;100 shares of its investment in Lov stock at $28 per share. The broker?s;commission on this sale is $75.;Prepare;Hoffman Company?s journal entries to reflect the above transactions for the;current year. (Omit the "$" sign in your response.);Date;General Journal Debit Credit;May 7;June 6;QS;15-6 Available-for-sale securities L.O. P3;Galaxy;Company completes the following transactions during the current year.;May 9;Purchases;400 shares of X&O stock as a short-term investment in available-for-sale;securities at a cost of $50 per share plus $400 in broker fees.;June 2;Sells;200 shares of its investment in X&O stock at $56 per share. The broker?s;commission on this sale is $180.;Dec. 31;The closing market price (fair value) of the X&O stock is $46 per share.;Prepare;the May 9 and June 2 journal entries and the December 31 adjusting entry. This;is the first and only time the company purchased such securities. (Omit the;$" sign in your response.);Date;General Journal Debit Credit;May 9;June 2;Dec.;31;QS;15-8 Equity method transactions L.O. P4;On May;20, 2011, Alexis Co. paid $750,000 to acquire 40% of TKR Corp.?s outstanding;stock. Also assume that TKR Corp. paid a $125,000 dividend on November 1, 2011;and reported a net income of $550,000 for 2011.;(a);Prepare the entries to record the receipt of the dividend. (Omit the;$" sign in your response.);Date;General Journal Debit Credit;Nov. 1;(b);Prepare;the entries to record the December 31, 2011, year-end adjustment required for;the investment account. (Omit the "$" sign in your response.);Date;General Journal Debit Credit;Dec.;31

 

Paper#37356 | Written in 18-Jul-2015

Price : $23
SiteLock