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P17-9 (Financial Statement Presentation of Availab...

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P17-9 (Financial Statement Presentation of Available-for-Sale Investments) Woolford Company has the following portfolio of available-for-sale securities at December 31, 2006. Percent Per Share Security Quantity Interest Cost Market Favre, Inc. 2,000 shares 8% $11 $16 Brady Corp. 5,000 shares 14% 23 17 McNabb Company 4,000 shares 2% 31 24 Problems ? 895 (L0 3, 5) (L0 2) (L0 3, 4, 5) Instructions (a) What should be reported on Woolford?s December 31, 2006, balance sheet relative to these longterm available-for-sale securities? On December 31, 2007, Woolford?s portfolio of available-for-sale securities consisted of the following common stocks. Percent Per Share Security Quantity Interest Cost Market Brady Corp. 5,000 shares 14% $23 $30 McNabb Company 4,000 shares 2% 31 23 McNabb Company 2,000 shares 1% 25 23 At the end of year 2007, Woolford Company changed its intent relative to its investment in Favre, Inc. and reclassified the shares to trading securities status when the shares were selling for $9 per share. (b) What should be reported on the face of Woolford?s December 31, 2007, balance sheet relative to available-for-sale securities investments? What should be reported to reflect the transactions above in Woolford?s 2007 income statement? (c) Assuming that comparative financial statements for 2006 and 2007 are presented, draft the footnote necessary for full disclosure of Woolford?s transactions and position in equity securities.

 

Paper#9342 | Written in 18-Jul-2015

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