(b) On December 31, 2018, Ramey Associates owned the following Sccurities, held as a long term investment. The securities are not held for influence or control of the investee. Common Stock Share Cost Hurst co. 1.000 TK.60,000 Pine co. 3,000 ТК.45,000 Scott co. 500 TК. 30,000 On December 31,2010,the total fair value of the securities was equal to its cost.In 2019,the following transactions occurred. July 1 Received Tk. 2 per share semiannual cash dividend on pine co. common stock. Aug 1 Received $0.50 per share cash dividend on Hurst co. common stock. Sep. 1 Sold 1,500 shares of Pine Co. common stock for cash at TK.17 Oct. 1 Sold 200 shares of Hurst co. common stock for cash at TK.58 Nov. 1 Received $1 per cash dividend on scott co. common stock. 31 Received $1 per share semiannual cash dividend on pine o. common stock. At December 31,the fair valucs per share of the common stocks were:Hurst co. TK.62,Pinc co.TK.14 and Scott Co.TΚ. 59 Instructions i)Journalize the 2019 transactions and post to the account stock Investments. ii)Prepare the adjusting entry at December 31.2019 to show securities at fair value.

(b) On December 31, 2018, Ramey Associates owned the following Sccurities, held as a long term investment. The securities are not held for influence or control of the investee. Common Stock Share Cost Hurst co. 1.000 TK.60,000 Pine co. 3,000 ТК.45,000 Scott co. 500 TК. 30,000 On December 31,2010,the total fair value of the securities was equal to its cost.In 2019,the following transactions occurred. July 1 Received Tk. 2 per share semiannual cash dividend on pine co. common stock. Aug 1 Received $0.50 per share cash dividend on Hurst co. common stock. Sep. 1 Sold 1,500 shares of Pine Co. common stock for cash at TK.17 Oct. 1 Sold 200 shares of Hurst co. common stock for cash at TK.58 Nov. 1 Received $1 per cash dividend on scott co. common stock. 31 Received $1 per share semiannual cash dividend on pine o. common stock. At December 31,the fair valucs per share of the common stocks were:Hurst co. TK.62,Pinc co.TK.14 and Scott Co.TΚ. 59 Instructions i)Journalize the 2019 transactions and post to the account stock Investments. ii)Prepare the adjusting entry at December 31.2019 to show securities at fair value.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 23E

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During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Hamilton Companys balance sheet on January 1, 2019, was as follows: Korbel Company is considering purchasing Hamilton (a privately held company) and discovers the following about Hamilton: a. No allowance for doubtful accounts has been established. A 10,000 allowance is considered appropriate. b. Marketable securities are valued at cost. The current market value is 60,000. c. The LIFO inventory method is used. The FIFO inventory of 140,000 would be used if the company is acquired. d. Land, included in property, plant, and equipment, which is recorded at its cost of 50,000, is worth 120,000. The remaining property, plant, and equipment is worth 10% more than its depreciated cost. e. The company has an unrecorded trademark that is worth 70,000. f. The companys bonds are currently trading for 130,000. g. The pension liability is understated by 40,000. Required: 1. Compute the amount of goodwill if Korbel agrees to pay 500,000 cash for Hamilton. 2. Next Level What are the reasons that the book value of Hamiltons net identifiable assets differ from their market value? 3. Prepare the journal entry to record the acquisition on the books of Korbel assuming Hamilton is liquidated. 4. If Korbel agrees to pay only 400,000 cash, how much goodwill exists? 5. If Korbel pays only 400,000 cash, prepare the journal entry to record the acquisition on its books, assuming Hamilton is liquidated.
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