Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter AH, Problem H.8BE
To determine
Balance sheet: This is a financial statement that shows the assets, liabilities, and
To Prepare: The balance sheet (partial) of Corporation P.
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Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke).
Debt: 2,500 bonds outstanding, current market price of the bond is $1,080.
Preferred Stock: 3,000 shares outstanding, selling for $98.
Common Stock: 60,000 shares outstanding, selling for $55 per share.
Cullumber Corporation has the following long-term investments. (1) Common stock of Eidman Co. (10% ownership), cost $112,000, fair value $119,000. (2) Common stock of Pickerill Inc. (30% ownership), cost $212,000, equity $262,000. (3) Debt investment, cost $102,000, fair value $162,000.Prepare the investments section of the balance sheet.
Cullumber CorporationBalance Sheet
Current AssetsCurrent LiabilitiesIntangible AssetsInvestmentsInvestment In Stock, at fair value Investment In Stock, at Equity Long-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal InvestmentsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityDebt Investments, at fair value
Current Assets Current Liabilities Intangible Assets Investments Investment In Stock, at fair value…
McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date.
Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000
Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000
Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000
On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000.
Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.
Chapter AH Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. AH - Prob. 1QCh. AH - Prob. 2QCh. AH - Prob. 3QCh. AH - Prob. 4QCh. AH - What is the cost of an investment in stock?Ch. AH - Prob. 6QCh. AH - Prob. 7QCh. AH - Prob. 8QCh. AH - Prob. 9QCh. AH - Distinguish between the cost and equity methods of...
Ch. AH - What are consolidated financial statements?Ch. AH - What are the valuation guidelines for trading and...Ch. AH - Prob. 13QCh. AH - Prob. 14QCh. AH - Prob. 15QCh. AH - Prob. 16QCh. AH - Prob. 17QCh. AH - Prob. 18QCh. AH - Prob. H.1BECh. AH - Prob. H.2BECh. AH - Prob. H.3BECh. AH - Prob. H.4BECh. AH - Prob. H.5BECh. AH - Prob. H.6BECh. AH - Prob. H.7BECh. AH - Prob. H.8BECh. AH - Prob. H.1ECh. AH - Prob. H.2ECh. AH - Prob. H.3ECh. AH - Prob. H.4ECh. AH - Prob. H.5ECh. AH - Prob. H.6ECh. AH - Prob. H.7ECh. AH - Prob. H.8ECh. AH - Prob. H.1PCh. AH - Prob. H.2PCh. AH - Prob. H.3PCh. AH - Prob. H.4PCh. AH - Prob. H.5PCh. AH - Prob. H.6P
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