Mizzou ACCTCY 2037 - Open Ended problems practice answers 22, 23, appendix (31 pages)

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Open Ended problems practice answers 22, 23, appendix



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Open Ended problems practice answers 22, 23, appendix

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Pages:
31
School:
University of Missouri
Course:
Acctcy 2037 - Accounting II

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At the beginning of January 2011 Belford Buckle Company held 500 shares of Wirl common stock in its investment portfolio of available for sale securities These shares had cost 9 000 and had a market value of 9 500 on January 1 2011 During 2011 Belford had several other transactions relating to its investments in available for sale securities as follows On January 7 Belford purchased 400 shares of Nirt common stock for 6 000 and on July 1 Belford purchased 10 10 000 bonds of Fess Company for 10 000 The bonds pay interest on June 30 and December 31 On August 5 Belford sold the 500 shares of Wirl common stock for 9 900 On December 15 Belford received cash dividends of 1 per share on the Nirt common stock and on December 31 it received the interest on the Fess bonds At the end of December the Nirt shares had a market value of 5 700 and the Fess Bonds had a market value of 10 200 Required 1 Record the 2011 investment transactions and events for Belford Keep track of the balance in the Investments account 2 Show how Belford would report the results of the investment transactions and events on its 2011 income statement and on its December 31 2011 balance sheet assuming it expects to sell the investments in 2012 1 Assets Cash 1 1 1 07 7 01 8 05 12 15 6 000 10 000 9 900 400 Liabilitie s Investments in Available forSale Securities 9 500 6 000 Stockholders Equity Unrealized Change In Market Value Of Investments Bal 500 Gain On Sale 500 900a Los s On Sale Div Rev Int Rev 10 000 9 500 12 31 500 12 31 100 Ending 5 200 15 900 Bal a Gain Cash received Cost a 900 9 900 9 000 b Security Cost Market Value Change Nirt Stock 6 000 5 700 300 Fess bonds 10 000 10 200 200 Total 16 000 15 900 100 2 2011 Income Statement 40 0 500 100 b 100 900 40 0 500 Other Items Gain on sale of investments 900 Dividend revenue 400 Interest revenue 500 2011 Balance Sheet Assets Current Assets Investments in available for sale securities 15 900 Stockholders Equity Unrealized change in market value of



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