Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 15, Problem 4PA
O’Brien Industries Inc. is a book publisher. The comparative unclassified balance sheets for December 31, 2017 and 2016 follow. Selected missing balances are shown by letters.
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2016, are as follows:
Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding shares of Jolly Roger Co. The following selected investment transactions occurred during 2017:
| May 5. | Purchased 3,080 shares of Gozar Inc. at $30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security. |
| Oct. 1. | Purchased $40,000 of Nightline Co. 6%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. |
| 9. | Dividends of $12,500 are received on the Jolly Roger Co. investment. |
| Dec. 31. | Jolly Roger Co. reported a total net income of $112,000 for 2017. O’Brien Industries Inc. recorded equity earnings for its share of Jolly Roger Co. net income. |
| 31. | Accrued three months of interest on the Nightline bonds. |
| 31. | Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: |
| 31. | Closed the O’Brien Industries Inc. net income of $146,230. O’Brien Industries Inc. paid no dividends during the year. |
Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
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Chapter 15 Solutions
Financial Accounting
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