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Available-for-Sale Securities—Statement Presentation Fernandez Corp invested its excess cash in available-for-sale securities during 2012 As of December 31 2012 the portfolio of available

(Available-for-Sale Securities—Statement Presentation) Fernandez Corp. invested its excess cash in available-for-sale securities during 2012. As of December 31, 2012, the portfolio of available-for-sale securities consisted of the following common stocks.

Security

Quantity

 

Cost

Fair Value

Lindsay Jones, Inc.

1,000 shares

 

$ 15,000

$ 21,000

Poley Corp.

2,000 shares

 

40,000

42,000

Arnold Aircraft

2,000 shares

 

72,000

60,000

   

Total

$127,000

$123,000

Instructions

(a) What should be reported on Fernandez’s December 31, 2012, balance sheet relative to these securities? What should be reported on Fernandez’s 2012 income statement? On December 31, 2013, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks.

Security

Quantity

 

Cost

Fair Value

Lindsay Jones, Inc.

1,000 shares

 

$ 15,000

$20,000

Lindsay Jones, Inc.

2,000 shares

 

33,000

40,000

Duff Company

1,000 shares

 

16,000

12,000

Arnold Aircraft

2,000 shares

 

72,000

22,000

   

Total

$136,000

$94,000

During the year 2013, Fernandez Corp. sold 2,000 shares of Poley Corp. for $38,200 and purchased 2,000 more shares of Lindsay Jones, Inc. and 1,000 shares of Duff Company.

(b) What should be reported on Fernandez’s December 31, 2013, balance sheet? What should be reported on Fernandez’s 2013 income statement? On December 31, 2014, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks.

Security

Quantity

 

Cost

Fair Value

Arnold Aircraft

2,000 shares

 

$72,000

$82,000

Duff Company

500 shares

 

8,000

6,000

   

Total

$80,000

$88,000

During the year 2014, Fernandez Corp. sold 3,000 shares of Lindsay Jones, Inc. for $39,900 and 500 shares of Duff Company at a loss of $2,700.

(c) What should be reported on the face of Fernandez’s December 31, 2014, balance sheet? What should be reported on Fernandez’s 2014 income statement?

(d) What would be reported in a statement of comprehensive income at (1) December 31, 2012, and (2) December 31, 2013?

Jun 18 2020 View more View Less

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