Investment : It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares. Securities: Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds. Journalizing : It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

Question

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Answer 1

Question

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

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Answer 2

Question

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

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Answer 3

Question

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

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Answer 4

Question

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

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Answer 5

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

Answer 6

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

Answer 7

Chapter 12, Problem 12.2AP

(a)

To determine

Investment:

It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the book of Company K and post debt investment and stock investment to T-account.

Answer 8

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

Answer 9

(b)

To determine

To prepare: The adjusting journal entries in the book of Company K.

Answer 10

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

Answer 11

(c)

To determine

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

Answer 12

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

Answer 13

(d)

To determine

To prepare: The income statement of Company K for the year ended December 31, 2015.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - 5 What is the cost of an investment in stock? Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

To prepare: The adjusting journal entries in the book of Company K.

To prepare: The balance sheet of Company K for the year ended December 31, 2015.

To prepare: The income statement of Company K for the year ended December 31, 2015.

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Chapter 12 Solutions