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Equity Investments—Available-for-Sale Castleman Holdings In had the following available for-sale investment portfolio at January

Equity Investments—Available-for-Sale) Castleman Holdings, Inc. had the following available for-sale investment portfolio at January 1, 2012.

Evers Company

1,000 shares @ $15 each

$15,000

Rogers Company

900 shares @ $20 each

18,000

Chance Company

500 shares @ $9 each

4,500

Equity investments (available-for-sale) @ cost

 

37,500

Fair value adjustment (available-for-sale)

 

(7,500)

Equity investments (available-for-sale) @ fair value

 

$30,000

During 2012, the following transactions took place.

1. On March 1, Rogers Company paid a $2 per share dividend.

2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for $11 per share.

3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Co. stock at $16 per share.

4. At December 31, 2012, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8. During 2013, the following transactions took place.

5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for $8 per share.

6. On March 1, Rogers Company paid a $2 per share dividend.

7. On December 21, Evers Company declared a cash dividend of $3 per share to be paid in the next month.

8. At December 31, 2013, the stocks had the following price per shares values: Evers $19 and Rogers $21.

Instructions

(a) Prepare journal entries for each of the above transactions.

(b) Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2012 and 2013.

Jun 18 2020 View more View Less

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