Teasdale Inc. Balance Sheet December 31, Year 2 and Year 1 Dec. 31, Year 2 Dec. 31, Year 1 Cash $160,000 $156,000 Accounts receivable (net) 115,000 108,000 Available-for-sale investments (at cost)–Note 1 $ 91,200 a. Plus valuation allowance for available-for-sale investments b. 8,776 $ 99,976 Available-for-sale investments (fair value) 2$ C. Interest receivable d. $ 69,200 Investment in Wright Co. stock–Note 2 Office equipment (net) e. 96,000 105,000 f. Total assets $538,176 Accounts payable $ 91,000 $ 72,000 Common stock 80,000 80,000 Excess of issue price over par 250,000 250,000 Retained earnings 127,400 g. Unrealized gain (loss) on available-for-sale investments Total liabilities and stockholders'equity h. 8,776 2$ $538,176 i. Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows: No. of Shares Cost per Share Total Cost Total Fair Value $39,936 Alvarez Inc. stock 960 $38.00 $36,480 Hirsch Inc. stock 1,900 54,720 28.80 60,040 $91,200 $99,976 Available-for-Sale Fair Value Investments Alvarez Inc. stock $41.50 per share $26.00 per share share Hirsch Inc. stock $48.00 per 101 per $100 of face amount Richter Inc. stock Toon Co. bonds
Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 are provided below. Selected missing balances are shown by letters.
Please see the attachment for details:
Note 2. The Investment in Wright Co. stock is an equity method investment representing 30% of the outstanding shares of Wright Co.
The following selected investment transactions occurred during Year 2:
Mar. 18. Purchased 800 shares of Richter Inc. at $40, including brokerage commission. Richter is classified as an available-for-sale security.
July 12. Dividends of $12,000 are received on the Wright Co. investment.
Oct. 1. Purchased $24,000 of Toon Co. 4%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1.
Dec. 31. Wright Co. reported a total net income of $80,000 for Year 2. Teasdale recorded equity earnings for its share of Wright Co. net income.
31. Accrued interest for three months on the Toon Co. bonds purchased on October 1.
31. Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts:
Please see the attachment for details:
31. Closed the Teasdale Inc. net income of $51,240. Teasdale Inc. paid no dividends during the year.
Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
Trending now
This is a popular solution!
Step by step
Solved in 9 steps with 9 images
