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acct 212 homework 2 chapter 15

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Question;acct 212 homework 2 chapter 15;award:2 out of;2.00 points;Exercise 15-1 Accounting for short-term held to-maturity securities L.O.;P2;Prepare;journal entries to record the following transactions involving the short-term;securities investments of Maxwell Co., all of which occurred during year;2011.;a.;On;February 15, paid $128,000 cash to purchase FTR's 90-day short-term debt;securities ($128,000 principal), dated February 15, that pay 9% interest;(categorized as held-to-maturity securities). (Omit the "$" sign in your response.);b.;On May;16, received a check from FTR in payment of the principal and 90 days;interest on the debt securities purchased in transaction a. (Do not round your intermediate calculations. Use 360 days;a year. Omit the "$" sign in your response.);Explanation;2.;award:1.72 out of;2.00 points;Exercise 15-2 Accounting for short-term trading securities L.O. P1;Prepare;journal entries to record the following transactions involving the short-term;securities investments of Smart Co., all of which occurred during year 2011.;a.;On;March 22, purchased 820 shares of FIX Company stock at $24 per share plus a;$340 brokerage fee. These shares are categorized as trading securities. (Omit the "$" sign in your response.);b.;On;September 1, received a $3 per share cash dividend on the FIX Company stock;purchased in transaction a. (Omit;the "$" sign in your response.);c.;On;October 8, sold 410 shares of FIX Co. stock for $34 per share, less a $330;brokerage fee. (Do not round your;intermediate calculations. Omit the "$" sign in your response.);eBook LinkView Hint #1;3.;award:2 out of;2.00 points;Exercise 15-3 Accounting for short-term available-for-sale securities;L.O. P3;Prepare;journal entries to record the following transactions involving the short-term;securities investments of Prairie Co., all of which occurred during year;2011.;a.;On;August 1, paid $64,000 cash to purchase Better Buy's 11% debt securities;($64,000 principal), dated July 30, 2011, and maturing January 30, 2012;(categorized as available-for-sale securities). (Omit the "$" sign in your response.);b.;On;October 30, received a check from Better Buy for 90 days' interest on the;debt securities purchased in transaction a. (Do not round your intermediate calculations. Use 360 days;a year. Omit the "$" sign in your response.);General Journal;Debit;Credit;Oct.;30;Cash;Interest;revenue.;award:2 out of;2.00 points;Exercise 15-6 Accounting for trading securities L.O. P1;Forex;Co. purchases various investments in trading securities at a cost of $51,000;on December 27, 2011. (This is its first and only purchase of such securities.);At December 31, 2011, these securities had a fair value of $69,000.;1.;Prepare;the December 31, 2011, year-end adjusting entry for the trading securities;portfolio. (Omit the "$" sign in;your response.);2.;Prepare;the January 3, 2012, entry when Forex sells a portion of its trading;securities (that had originally cost $25,500) for $30,000. (Omit the "$" sign in your response.);5.;award:1 out of;1.00 point;Exercise 15-7 Adjusting available-for-sale securities to fair value L.O.;P3;On;December 31, 2011, Rollo Company held the following short-term investments in;its portfolio of available-for-sale securities. Rollo had no short-term;investments in its prior accounting periods.;Cost;Fair Value;Vicks;Corporation bonds payable;$;66,900;$;62,300;Pace;Corporation notes payable;52,800;44,900;Lake;Lugano Company common stock;86,600;83,800;Prepare;the December 31, 2011, adjusting entry to report these investments at fair value. (Omit the "$" sign in your response.);6.;award:2.82 out of;3.00 points;Exercise 15-8 Transactions in short-term and long-term investments L.O.;P1, P2, P3;a.;On;February 15, paid $120,000 cash to purchase American General's 120-day short-term;notes at par, which are dated February 15 and pay 9% interest (classified as;held-to-maturity).;b.;On;March 22, bought 600 shares of Frain Industries common stock at $35 cash per;share plus a $120 brokerage fee (classified as long-term available-for-sale;securities).;c.;On June;15, received a check from American General in payment of the principal and;120 days' interest on the notes purchased in transaction a.;d.;On July;30, paid $36,000 cash to purchase MP3 Electronics' 8% notes at par, dated July;30, 2011, and maturing on January 30, 2012 (classified as trading;securities).;e.;On;September 1, received a $0.54 per share cash dividend on the Frain Industries;common stock purchased in transaction b.;f.;On;October 8, sold 300 shares of Frain Industries common stock for $41 cash per;share, less a $100 brokerage fee.;g.;On;October 30, received a check from MP3 Electronics for three months? interest;on the notes purchased in transaction d.;Prepare;journal entries to record the above transactions involving both the;short-term and long-term investments of Sophia Corp., all of which occurred;during calendar year 2011. Use the account Short-Term Investments for any;transactions that you determine are short term. (Use 360-days a year. Do not round intermediate;calculations and round your final answers to the nearest dollar;amount. Omit the "$" sign in your response.);7.;award:1.40 out of;2.00 points;Exercise 15-11 Multiyear fair value adjustments to available-for-sale;securities L.O. P3;Ticker;Services began operations in 2009 and maintains long-term investments in;available-for-sale securities. The year-end cost and fair values for its;portfolio of these investments follow.;Cost;Fair;Value;December;31, 2009;$;369,070;$;357,998;December;31, 2010;420,740;445,984;December;31, 2011;572,206;676,920;December;31, 2012;864,031;768,988;Prepare;journal entries to record each year-end fair value adjustment for these;securities. (Omit the "$" sign in;your response.);8.;award:1.58 out of;2.00 points;Exercise 15-12 Classifying investments in securities, recording fair;values L.O. C1, P2, P3, P4;Information;regarding Central Company's individual investments in securities during its;calendar-year 2011, along with the December 31, 2011, fair values, follows.;a.;Investment;in Beeman Company bonds: $302,250 cost, $328,546 fair value. Central intends;to hold these bonds until they mature in 2016.;b.;Investment;in Baybridge common stock: 29,500 shares, $240,289 cost, $261,194 fair value.;Central owns 32% of Baybridge's voting stock and has a significant influence;over Baybridge.;c.;Investment;in Carroll common stock: 12,000 shares, $123,922 cost, $133,588 fair value.;This investment amounts to 3% of Carroll?s outstanding shares, and Central?s;goal with this investment is to earn dividends over the next few years.;d.;Investment;in Newtech common stock: 3,500 shares, $68,913 cost, $67,741 fair value.;Central's goal with this investment is to reap an increase in fair value of;the stock over the next three to five years. Newtech has 30,000 common shares;outstanding.;e.;Investment;in Flock common stock: 16,300 shares, $75,563 cost, $80,248 fair value. This;stock is marketable and is held as an investment of cash available for;operations.;Required;1.;Identify;whether each investment should be classified as a short-term or long-term;investment. For each long-term investment, indicate in which of the long-term;investment classifications it should be placed.(Select;NA" in classification of long-term investment, if the type of;investment is short term.);2.;Prepare;a journal entry dated December 31, 2011, to record the fair value adjustment;of the long-term investments in available-for-sale securities. Central had no;long-term investments prior to year 2011.(Omit the;$" sign in your response.);9.;award:2 out of;2.00 points;Exercise 15-13 Securities transactions, equity method L.O. P4;Listed;below are a few events and transactions of Kash Company.;2011;Jan.;2;Purchased;70,000 shares of Bushtex Co. common stock for $476,000 cash plus a broker's;fee of $4,650 cash. Bushtex has 127,273 shares of common stock outstanding;and its policies will be significantly influenced by Kash.;Sept.;1;Bushtex;declared and paid a cash dividend of $3.10 per share.;Dec.;31;Bushtex;announced that net income for the year is $883,275.;2012;June;1;Bushtex;declared and paid a cash dividend of $3.35 per share.;Dec.;31;Bushtex;announced that net income for the year is $990,184.;Dec.;31;Kash;sold 7,000 shares of Bushtex for $371,852 cash.;Prepare;journal entries to record the above transactions and events of Kash Company. (Do not round intermediate calculations and round;your final answers to the nearest dollar amount. Omit the;$" sign in your response.);10.;award:1 out of;1.00 point;Exercise 15-15A Foreign currency transactions L.O. C3;Desi of;New York sells its products to customers in the United States and the United;Kingdom. On December 16, 2011, Desi sold merchandise on credit to Bronson;Ltd. of London at a price of 18,000 pounds. The exchange rate on that day for;?1 was $2.0543. On December 31, 2011, when Desi prepared its financial;statements, the rate was ?1 for $2.0481. Bronson paid its bill in full on;January 15, 2012, at which time the exchange rate was ?1 for $2.0502. Desi;immediately exchanged the 18,000 pounds for U.S. dollars.;Prepare;Desi's journal entries on December 16, December 31, and January 15. (Round your intermediate calculations and;final answers to the nearest dollar amount. Omit the "$" sign;in your response.);11.;award:2 out of;2.00 points;Exercise 15-16A Computing foreign exchange gains and losses on;receivables L.O. C3;On May;8, 2011, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican;company). The terms of the sale required Lopez to pay 730,000 pesos on;February 10, 2012. Jett prepares quarterly financial statements on March 31;June 30, September 30, and December 31. The exchange rates for pesos during;the time the receivable is outstanding follow.;May;8, 2011;$;0.1811;June;30, 2011;0.1820;September;30, 2011;0.1831;December;31, 2011;0.1814;February;10, 2012;0.1853;1.;Compute;the foreign exchange gain or loss that Jett should report on each of its;quarterly income statements for the last three quarters of 2011 and the first;quarter of 2012. (Input all amounts as;positive values. Omit the "$" sign in your response.);2.;Compute;the amount receivable balance of Lopez reported on Jett's balance sheets at;the end of each of its last three quarters of 2011. (Omit the "$" sign in your response.)

 

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