Home / Questions / The following securities are in Frederick Company"s portfolio of long-term available-for-s...
The following securities are in Frederick Company"s portfolio of long-term available-for-sale securities at December 31, 2014.
|
|
Cost |
|
1,000 shares of Willhite Corporation common stock |
$52,000 |
|
1,400 shares of Hutcherson Corporation common stock |
84,000 |
|
1,200 shares of Downing Corporation preferred stock |
33,600 |
On December 31, 2014, the total cost of the portfolio equaled total fair value. Frederick had the following transactions related to the securities during 2015.
|
20 |
Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. |
|
|
28 |
Purchased 400 shares of $70 par value common stock of Liggett Corporation at $78 per share. |
|
|
30 |
Received a cash dividend of $1.15 per share on Hutcherson Corp. common stock. |
|
|
8 |
Received cash dividends of $0.40 per share on Downing Corp. preferred stock. |
|
|
18 |
Sold all 1,200 shares of Downing Corp. preferred stock at $27 per share. |
|
|
July |
30 |
Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. |
|
6 |
Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. |
|
|
1 |
Received a cash dividend of $1.50 per share on Liggett Corporation common stock. |
At December 31, 2015, the fair values of the securities were:
|
Hutcherson Corporation common stock |
$64 per share |
|
Liggett Corporation common stock |
$72 per share |
Instructions
(a)Prepare journal entries to record the transactions.
(b)Post to the investment accounts. (Use T-accounts.)
(c)Prepare the adjusting entry at December 31, 2015 to report the portfolio at fair value.
(d)Show the balance sheet presentation at December 31, 2015, for the investment-related accounts.
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