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Weygandt, Financial, 6e....... Neo, I need help with P13-1A

Customer Question

Weygandt, Financial, 6e.......
Neo,

I need help with P13-1A and P13-3A.

Thanks
Submitted: 4 years ago.
Category: Homework
Expert:  Neo replied 4 years ago.
Good day!

Thank you for requesting me. However, I do apologize I do not have a copy of Chapter 13. Can you post or upload the question instead?
Customer: replied 4 years ago.
P13-3A
On December 31, 2008, Ramey Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee.

Common Stock

SharesCost
Hurst Co.2,000$60,000
Pine Co.5,000 45,000
Scott Co.1,500 30,000

On December 31, 2008, the total fair value of the securities was equal to its cost. In 2009, the following transactions occurred.

July 1 Received $1 per share semiannual cash dividend on Pine Co. common stock.
Aug. 1 Received $0.50 per share cash dividend on Hurst Co. common stock.
Sept. 1 Sold 1,500 shares of Pine Co. common stock for cash at $8 per share, less brokerage fees of $300.
Oct. 1 Sold 800 shares of Hurst Co. common stock for cash at $33 per share, less brokerage fees of $500.
Nov. 1 Received $1 per share cash dividend on Scott Co. common stock.
Dec. 15 Received $0.50 per share cash dividend on Hurst Co. common stock.
Dec. 31 Received $1 per share semiannual cash dividend on Pine Co. common stock.

At December 31, the fair values per share of the common stocks were: Hurst Co. $32, Pine Co. $8, and Scott Co. $18.

Journalize the 2009 transactions and post to the account Stock Investments. (Use the T-account form.) (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

DateAccount / DescriptionDebitCredit
July 1 Debt investmentsRevenue from investmentLoss on sale of stock investmentsUnrealized gain or loss-EquityGain on sale of stock investmentsDividend revenueInterest receivableInterest revenueGain on sale of debt investmentsStock investmentsCashMarket adjustment-Available-for-saleUnrealized loss-incomeMarket adjustment-tradingUnrealized gain-incomeLoss on Sale of Debt investment$
Unrealized gain-incomeMarket adjustment-Available-for-saleUnrealized gain or loss-EquityInterest receivableRevenue from investmentUnrealized loss-incomeGain on sale of debt investmentsMarket adjustment-tradingStock investmentsLoss on Sale of Debt investmentLoss on sale of stock investmentsDividend revenueDebt investmentsCashGain on sale of stock investmentsInterest revenue $
Aug. 1 Gain on sale of debt investmentsUnrealized loss-incomeStock investmentsLoss on Sale of Debt investmentDebt investmentsCashMarket adjustment-tradingInterest receivableInterest revenueUnrealized gain-incomeGain on sale of stock investmentsDividend revenueLoss on sale of stock investmentsMarket adjustment-Available-for-saleUnrealized gain or loss-EquityRevenue from investment$
Loss on sale of stock investmentsRevenue from investmentInterest revenueCashMarket adjustment-tradingUnrealized loss-incomeInterest receivableGain on sale of stock investmentsMarket adjustment-Available-for-saleUnrealized gain-incomeDebt investmentsGain on sale of debt investmentsUnrealized gain or loss-EquityStock investmentsLoss on Sale of Debt investmentDividend revenue $
Sept. 1 Stock investmentsInterest receivableDebt investmentsGain on sale of stock investmentsUnrealized loss-incomeDividend revenueLoss on sale of stock investmentsUnrealized gain-incomeInterest revenueMarket adjustment-tradingLoss on Sale of Debt investmentGain on sale of debt investmentsMarket adjustment-Available-for-saleUnrealized gain or loss-EquityCashRevenue from investment$
Gain on sale of stock investmentsStock investmentsLoss on sale of stock investmentsCashDividend revenueInterest revenue$
Loss on Sale of Debt investmentGain on sale of stock investmentsUnrealized loss-incomeMarket adjustment-Available-for-saleGain on sale of debt investmentsMarket adjustment-tradingRevenue from investmentInterest revenueUnrealized gain or loss-EquityInterest receivableUnrealized gain-incomeCashStock investmentsDividend revenueLoss on sale of stock investmentsDebt investments $
Oct. 1 Debt investmentsUnrealized loss-incomeMarket adjustment-tradingLoss on Sale of Debt investmentCashLoss on sale of stock investmentsGain on sale of stock investmentsUnrealized gain-incomeDividend revenueStock investmentsUnrealized gain or loss-EquityInterest revenueRevenue from investmentGain on sale of debt investmentsInterest receivableMarket adjustment-Available-for-sale$
Stock investmentsInterest revenueMarket adjustment-Available-for-saleInterest receivableMarket adjustment-tradingUnrealized gain-incomeDebt investmentsLoss on sale of stock investmentsGain on sale of debt investmentsGain on sale of stock investmentsRevenue from investmentLoss on Sale of Debt investmentCashUnrealized gain or loss-EquityDividend revenueUnrealized loss-income $
Interest revenueMarket adjustment-tradingUnrealized loss-incomeRevenue from investmentUnrealized gain-incomeDebt investmentsUnrealized gain or loss-EquityLoss on sale of stock investmentsLoss on Sale of Debt investmentInterest receivableGain on sale of debt investmentsMarket adjustment-Available-for-saleGain on sale of stock investmentsCashDividend revenueStock investments $
Nov. 1 Market adjustment-tradingGain on sale of stock investmentsStock investmentsUnrealized loss-incomeRevenue from investmentInterest revenueCashDividend revenueDebt investmentsMarket adjustment-Available-for-saleLoss on sale of stock investmentsInterest receivableUnrealized gain or loss-EquityGain on sale of debt investmentsUnrealized gain-incomeLoss on Sale of Debt investment$
Interest receivableStock investmentsGain on sale of debt investmentsUnrealized loss-incomeCashMarket adjustment-Available-for-saleUnrealized gain-incomeRevenue from investmentLoss on Sale of Debt investmentMarket adjustment-tradingUnrealized gain or loss-EquityDividend revenueLoss on sale of stock investmentsGain on sale of stock investmentsInterest revenueDebt investments $
Dec. 15 Interest receivableDividend revenueLoss on Sale of Debt investmentStock investmentsLoss on sale of stock investmentsGain on sale of stock investmentsInterest revenueDebt investmentsGain on sale of debt investmentsUnrealized gain-incomeCashMarket adjustment-Available-for-saleUnrealized gain or loss-EquityRevenue from investmentUnrealized loss-incomeMarket adjustment-trading$
Unrealized loss-incomeLoss on sale of stock investmentsDividend revenueInterest revenueMarket adjustment-tradingGain on sale of debt investmentsLoss on Sale of Debt investmentCashGain on sale of stock investmentsStock investmentsDebt investmentsUnrealized gain-incomeInterest receivableMarket adjustment-Available-for-saleUnrealized gain or loss-EquityRevenue from investment $
Dec. 31 Debt investmentsCashUnrealized loss-incomeDividend revenueLoss on sale of stock investmentsInterest revenueInterest receivableGain on sale of debt investmentsMarket adjustment-Available-for-saleMarket adjustment-tradingUnrealized gain or loss-EquityGain on sale of stock investmentsRevenue from investmentUnrealized gain-incomeLoss on Sale of Debt investmentStock investments$
Interest receivableMarket adjustment-Available-for-saleUnrealized loss-incomeGain on sale of debt investmentsLoss on sale of stock investmentsMarket adjustment-tradingStock investmentsInterest revenueUnrealized gain-incomeRevenue from investmentDebt investmentsUnrealized gain or loss-EquityLoss on Sale of Debt investmentDividend revenueCashGain on sale of stock investments $

Stock Investments
2009 2009
Jan. 1 Balance Sept. 1
Oct. 1
Dec. 31Balance

Prepare the adjusting entry at December 31, 2009, to show the securities at fair value. The stock should be classified as available-for-sale securities.

DateAccount / DescriptionDebitCredit
Dec. 31 Loss on Sale of Debt investmentRevenue from investmentInterest revenueLoss on sale of stock investmentsUnrealized gain or loss-EquityDividend revenueStock investmentsUnrealized loss-incomeMarket adjustment-Available-for-saleUnrealized gain-IncomeCashMarket adjustment-TradingDebt investmentsInterest receivableGain on sale of debt investmentsGain on sale of stock investments$
Unrealized loss-incomeGain on sale of debt investmentsLoss on Sale of Debt investmentGain on sale of stock investmentsLoss on sale of stock investmentsMarket adjustment-TradingDividend revenueMarket adjustment-Available-for-saleUnrealized gain or loss-EquityUnrealized gain-IncomeDebt investmentsRevenue from investmentInterest revenueStock investmentsCashInterest receivable $

Show the balance sheet presentation of the investments at December 31, 2009. At this date, Ramey Associates has common stock $1,500,000 and retained earnings $1,000,000. (If there is a loss, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Balance Sheet

Investments
Unrealized loss on available-for-sale securitiesRetained earningsShort-term investments, at fair valueUnrealized gain on trading securitiesInv. in stock of less 20% owned companies, at fair valueCommon stock $
Stockholders' Equity
Inv. in stock of less 20% owned companies, at fair valueRetained earningsShort-term investments, at fair valueUnrealized loss on available-for-sale securitiesUnrealized gain on trading securitiesCommon stock$
Common stockUnrealized loss on available-for-sale securitiesShort-term investments, at fair valueUnrealized gain on trading securitiesRetained earningsInv. in stock of less 20% owned companies, at fair value

 

Total paid-in capital and retained earnings
Less: Unrealized loss on available-for-sale securitiesInv. in stock of less 20% owned companies, at fair valueCommon stockRetained earningsShort-term investments, at fair valueUnrealized gain on trading securities

 

Total stockholders equity

$

Customer: replied 4 years ago.

P13-1A

 

Davison Carecenters Inc. provides financing and capital to the health-care industry, with a particular focus on nursing homes for the elderly. The following selected transactions relate to bonds acquired as an investment by Davison, whose fiscal year ends on December 31.

2008
Jan. 1Purchased at par $2,000,000 of Hannon Nursing Centers, Inc., 10-year, 8% bonds dated January 1, 2008, directly from Hannon.
July 1Received the semiannual interest on the Hannon bonds.
Dec. 31Accrual of interest at year-end on the Hannon bonds.

(Assume that all intervening transactions and adjustments have been properly recorded and that the number of bonds owned has not changed from December 31, 2008, to December 31, 2010.)

2011
Jan. 1Received the semiannual interest on the Hannon bonds.
Jan. 1Sold $1,000,000 Hannon bonds at 106. The broker deducted $6,000 for commissions and fees on the sale.
July 1Received the semiannual interest on the Hannon bonds.
Dec. 31Accrual of interest at year-end on the Hannon bonds.

Journalize the listed transactions for the years 2008 and 2011. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

DateAccount / DescriptionDebitCredit
2008
Jan.1Unrealized gain-incomeRevenue from investmentMarket adjustment-Available-for-saleDebt investmentsLoss on sale of stock investmentsGain on sale of debt investmentsUnrealized gain or loss-EquityCashInterest revenueInterest receivableLoss on Sale of Debt investmentUnrealized loss-incomeStock investmentsDividend revenueGain on sale of stock investmentsMarket adjustment-trading$
Loss on Sale of Debt investmentInterest receivableMarket adjustment-tradingGain on sale of stock investmentsUnrealized gain-incomeLoss on sale of stock investmentsMarket adjustment-Available-for-saleRevenue from investmentUnrealized loss-incomeDividend revenueGain on sale of debt investmentsInterest revenueCashUnrealized gain or loss-EquityStock investmentsDebt investments$
July1Interest receivableLoss on sale of stock investmentsStock investmentsGain on sale of debt investmentsCashDebt investmentsDividend revenueGain on sale of stock investmentsRevenue from investmentUnrealized loss-incomeInterest revenueMarket adjustment-Available-for-saleUnrealized gain or loss-EquityMarket adjustment-tradingUnrealized gain-incomeLoss on Sale of Debt investment$
Dividend revenueMarket adjustment-tradingInterest revenueRevenue from investmentMarket adjustment-Available-for-saleUnrealized gain or loss-EquityLoss on sale of stock investmentsStock investmentsDebt investmentsUnrealized loss-incomeCashGain on sale of stock investmentsInterest receivableUnrealized gain-incomeGain on sale of debt investmentsLoss on Sale of Debt investment$
Dec. 31Revenue from investmentUnrealized loss-incomeLoss on Sale of Debt investmentLoss on sale of stock investmentsMarket adjustment-tradingGain on sale of stock investmentsInterest receivableCashDebt investmentsUnrealized gain-incomeStock investmentsDividend revenueInterest revenueMarket adjustment-Available-for-saleGain on sale of debt investmentsUnrealized gain or loss-Equity$
Unrealized gain or loss-EquityDividend revenueLoss on sale of stock investmentsGain on sale of stock investmentsStock investmentsRevenue from investmentGain on sale of debt investmentsUnrealized loss-incomeMarket adjustment-tradingUnrealized gain-incomeDebt investmentsCashLoss on Sale of Debt investmentInterest receivableMarket adjustment-Available-for-saleInterest revenue$
2011
Jan. 1Debt investmentsDividend revenueRevenue from investmentMarket adjustment-tradingLoss on sale of stock investmentsUnrealized gain or loss-EquityUnrealized loss-incomeInterest receivableGain on sale of debt investmentsMarket adjustment-Available-for-saleStock investmentsGain on sale of stock investmentsUnrealized gain-incomeLoss on Sale of Debt investmentInterest revenueCash$
Interest revenueCashRevenue from investmentStock investmentsGain on sale of debt investmentsDebt investmentsUnrealized gain-incomeMarket adjustment-Available-for-saleGain on sale of stock investmentsUnrealized gain or loss-EquityMarket adjustment-tradingInterest receivableLoss on sale of stock investmentsLoss on Sale of Debt investmentUnrealized loss-incomeDividend revenue$
Jan. 1Debt investmentsLoss on sale of stock investmentsMarket adjustment-Available-for-saleInterest receivableGain on sale of debt investmentsDividend revenueInterest revenueCashUnrealized gain or loss-EquityStock investmentsLoss on Sale of Debt investmentGain on sale of stock investmentsRevenue from investmentUnrealized loss-incomeMarket adjustment-tradingUnrealized gain-income$
Gain on sale of stock investmentsMarket adjustment-Available-for-saleCashStock investmentsGain on sale of debt investmentsDebt investmentsInterest revenueInterest receivableMarket adjustment-tradingUnrealized gain-incomeUnrealized gain or loss-EquityLoss on sale of stock investmentsRevenue from investmentUnrealized loss-incomeLoss on Sale of Debt investmentDividend revenue$
Dividend revenueUnrealized loss-incomeUnrealized gain-incomeRevenue from investmentCashLoss on Sale of Debt investmentMarket adjustment-tradingLoss on sale of stock investmentsGain on sale of debt investmentsUnrealized gain or loss-EquityInterest receivableDebt investmentsInterest revenueMarket adjustment-Available-for-saleStock investmentsGain on sale of stock investments$
July 1Gain on sale of debt investmentsRevenue from investmentLoss on sale of stock investmentsMarket adjustment-tradingDividend revenueUnrealized loss-incomeGain on sale of stock investmentsUnrealized gain or loss-EquityMarket adjustment-Available-for-saleUnrealized gain-incomeCashStock investmentsInterest receivableDebt investmentsLoss on Sale of Debt investmentInterest revenue$
CashDividend revenueInterest receivableInterest revenueGain on sale of debt investmentsRevenue from investmentUnrealized loss-incomeMarket adjustment-Available-for-saleDebt investmentsUnrealized gain or loss-EquityMarket adjustment-tradingStock investmentsUnrealized gain-incomeLoss on Sale of Debt investmentGain on sale of stock investmentsLoss on sale of stock investments$
Dec. 31Gain on sale of stock investmentsLoss on Sale of Debt investmentLoss on sale of stock investmentsCashDebt investmentsUnrealized gain-incomeInterest revenueDividend revenueMarket adjustment-Available-for-saleUnrealized loss-incomeUnrealized gain or loss-EquityGain on sale of debt investmentsInterest receivableStock investmentsRevenue from investmentMarket adjustment-trading$
Revenue from investmentInterest revenueLoss on sale of stock investmentsGain on sale of debt investmentsLoss on Sale of Debt investmentUnrealized loss-incomeUnrealized gain or loss-EquityInterest receivableMarket adjustment-tradingDividend revenueUnrealized gain-incomeCashMarket adjustment-Available-for-saleDebt investmentsGain on sale of stock investmentsStock investments$

Assume that the fair value of the bonds at December 31, 2008, was $2,200,000. These bonds are classified as available-for-sale securities. Prepare the adjusting entry to record these bonds at fair value.

DateAccount / DescriptionDebitCredit
Dec. 31Unrealized gain or loss-EquityRevenue from investmentUnrealized loss-incomeCashGain on sale of debt investmentsDividend revenueLoss on Sale of Debt investmentInterest revenueMarket adjustment-tradingLoss on sale of stock investmentsUnrealized gain-incomeMarket adjustment-Available-for-saleInterest receivableDebt investmentsStock investmentsGain on sale of stock investments$
Debt investmentsStock investmentsGain on sale of stock investmentsDividend revenueCashUnrealized loss-incomeUnrealized gain or loss-EquityLoss on sale of stock investmentsRevenue from investmentUnrealized gain-incomeMarket adjustment-Available-for-saleInterest revenueInterest receivableMarket adjustment-tradingLoss on Sale of Debt investmentGain on sale of debt investments$

Based on your analysis in part (b) of the question, show the balance sheet presentation of the bonds and interest receivable at December 31, 2008. Assume the investments are considered long-term.

Balance Sheet

InvestmentsProperty, plant and equipmentCurrent assetsCurrent liabilitiesLong-term debtStockholders' equity
Debt investments, at equityShort-term investments at equityInterest receivableDebt investments, at fair valueInterest payableShort-term investments at fair value$
Stockholders' equityInvestmentsCurrent assetsProperty, plant and equipmentCurrent liabilitiesLong-term debt
Debt investments, at fair valueInterest payableShort-term investments at equityDebt investments, at equityInterest receivableShort-term investments at fair value$

The unrealized gain or loss would reported in the Property, plant and equipmentCost of goods soldStockholders' equityOther revenues and gainsOperating expensesCurrent liabilitiesOther expenses and lossesLong-term liabilitiesCurrent assetsRevenues section of the retained earnings statementbalance sheetincome statement.

Expert:  Neo replied 4 years ago.
I am very sorry. I'll opt out to let other experts assist you.

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