Homework Help is Here – Start Your Trial Now!
Business
Accounting
Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sept. 8. A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept. 12. Received a cash dividend of $0.25 per share plus an extra dividend of $0.05 per share on Sankal Inc. stock. Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $450,000 in Year 2. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $22 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $25 to $22 per share.

Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sept. 8. A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept. 12. Received a cash dividend of $0.25 per share plus an extra dividend of $0.05 per share on Sankal Inc. stock. Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $450,000 in Year 2. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $22 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $25 to $22 per share.

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 15.13EX
See similar textbooks
icon
Related questions
Question
PR 15-3A Stock investment transactions, equity method and available-for-sale securities ов) 3, 4 Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: cel Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sept. 8. A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept. 12. Received a cash dividend of $0.25 per share plus an extra dividend of $0.05 per share on Sankal Inc. stock. Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $450,000 in Year 2. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $22 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $25 to $22 per share. Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, acanned, or duplicated, in whole or in part. WCN 02-200-202 756 Contents Notebook Bookmarks Flashcards IK !
Transcribed Image Text:PR 15-3A Stock investment transactions, equity method and available-for-sale securities ов) 3, 4 Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: cel Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sept. 8. A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept. 12. Received a cash dividend of $0.25 per share plus an extra dividend of $0.05 per share on Sankal Inc. stock. Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $450,000 in Year 2. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $22 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $25 to $22 per share. Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, acanned, or duplicated, in whole or in part. WCN 02-200-202 756 Contents Notebook Bookmarks Flashcards IK !
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 20 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Trading
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Accounting (Text Only)
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Corporate Financial Accounting
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial & Managerial Accounting
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS