Southeast Bank invests in equity securities and prepares quarterly financial statements. At the beginning of the fourth quarter of 2019, the bank held as an investment in equity securities 220 shares of Eglan Company common stock that originally cost $5,940. At that time, these securities had a fair value of $5,720. During the fourth quarter, the bank engaged in the following transactions: Oct. 26 Purchased 340 shares of Farrell Company common stock for $34 per share. Nov. 26 Sold 220 shares of Eglan common stock for $25 per share. Dec. 10 Purchased 390 shares of Gray Company common stock for $43 per share. On December 31, 2019, the quoted market prices of the shares were as follows: Eglan Company, $56 per share; Farrell Company, $38 per share; and Gray Company, $42 per share. Required: 1. Prepare journal entries to record the preceding information for the fourth quarter. 2. Show what the bank reports on its fourth quarter 2019 income statement for these equity securities. 3. Show how the bank reports this investment in equity securities on its balance sheet at the end of the fourth quarter of 2019.
Southeast Bank invests in equity securities and prepares quarterly financial statements. At the beginning of the fourth quarter of 2019, the bank held as an investment in equity securities 220 shares of Eglan Company common stock that originally cost $5,940. At that time, these securities had a fair value of $5,720. During the fourth quarter, the bank engaged in the following transactions: Oct. 26 Purchased 340 shares of Farrell Company common stock for $34 per share. Nov. 26 Sold 220 shares of Eglan common stock for $25 per share. Dec. 10 Purchased 390 shares of Gray Company common stock for $43 per share. On December 31, 2019, the quoted market prices of the shares were as follows: Eglan Company, $56 per share; Farrell Company, $38 per share; and Gray Company, $42 per share. Required: 1. Prepare journal entries to record the preceding information for the fourth quarter. 2. Show what the bank reports on its fourth quarter 2019 income statement for these equity securities. 3. Show how the bank reports this investment in equity securities on its balance sheet at the end of the fourth quarter of 2019.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...
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Southeast Bank invests in equity securities and prepares quarterly financial statements. At the beginning of the fourth quarter of 2019, the bank held as an investment in equity securities 220 shares of Eglan Company common stock that originally cost $5,940. At that time, these securities had a fair value of $5,720. During the fourth quarter, the bank engaged in the following transactions:
| Oct. 26 | Purchased 340 shares of Farrell Company common stock for $34 per share. |
| Nov. 26 | Sold 220 shares of Eglan common stock for $25 per share. |
| Dec. 10 | Purchased 390 shares of Gray Company common stock for $43 per share. |
On December 31, 2019, the quoted market prices of the shares were as follows: Eglan Company, $56 per share; Farrell Company, $38 per share; and Gray Company, $42 per share.
Required:
| 1. | Prepare |
| 2. | Show what the bank reports on its fourth quarter 2019 income statement for these equity securities. |
| 3. | Show how the bank reports this investment in equity securities on its balance sheet at the end of the fourth quarter of 2019. |
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