AssetsLiab.Stockholders’ EquityNet IncomeRevenuesExp.Unrealized IncreaseGain on Sale of InvestmentDividend RevenueAssetsLiab.Stockholders’ Equity Net Income RevenuesUnrealized IncreaseGain on Sale of InvestmentAssetsLiab.Stockholders’ Equity Net Income RevenuesInvestment1,500bLiabilitiesStockholders’ Equity .Common StockAdd’l Paid-in CapitalRetained Earnings(A) Acquired 100 shares of its common stock for $25 per share.(B) Reissued 40 shares for $30 per share.LiabilitiesStockholders’ Equity .Common StockAdd’l Paid-in CapitalRetained EarningsLiabilitiesStockholders’ Equity .Common StockAdd’l Paid-in CapitalRetained EarningsLiabilitiesStockholders’ Equity .Common StockAdd’l Paid-in CapitalAt 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 = Liabilities+ Stockholders’ EquityCash Investments inAvailable-for-SaleSecuritiesUnrealized ChangeIn MarketValueOfInvestmentsGainOnSaleLossOnSaleDividend RevInterest Rev1/11/077/018/05 12/1512/3112/31Ending Bal____________2.2011 Income Statement2011 Balance SheetOn January 1, 2011, Foley Aircraft Company purchased on the stock market 25% of Pet Helicopter Inc.’s 80,000 shares of common stock, paying $5.25 per share. On that date, the bookvalue of Pet’s stockholders’ equity was $420,000. On December 31, 2011, Foley reported a balance in its investment account for Pet of $120,000. Pet did not pay dividend in 2011.Required:1. How much did Foley pay for its investment in Pet?2. How much did Foley report as its 2011 income in regard to its investment in Pet?3. What was the total net income of Pet during 2011?On January 1, 2011, Hoffman Company purchased 12-year, zero-coupon bonds issued by Martinez Company. The bonds have a face value of $400,000 and were purchased to yield 8%. Hoffman expects to hold these bonds until maturity, so it uses the amortized cost method to account for its investment.Required:1. Compute the purchase price of the bonds.2. Compute the interest revenue for 2011 and 2012.3. What is the book value of the bonds on December 31, 2012?On January 10, 2011, Ryland Carpet Corporation is incorporated and is authorized to issue 20,000 shares of $7 par value common stock. On January 12, 2011, it issues 1,000 shares at $12 per share, and on July 5, 2011, it issues another 800 shares at $15 per share.Required:1. Record the two issuances of common stock for Ryland.2. Prepare the contributed capital section of Ryland’s December 31, 2011 balance sheet.1.Assets= Liabilities+ Stockholders’ EquityContributed CapitalCash CommonStockAdditionalPaid-inCapital1/127/052. 2011 Balance SheetAntley Company issued 200 shares of $10 par value common stock in exchange for five acres of land.Required: Record the acquisition of the land for each of the following independent situations:a. The common stock is currently selling on the stock market for $80 per shareb. The land is appraised at $15,000, but the stock is not actively traded in the stock market.a.Assets= Liabilities+ Stockholders’ EquityContributed CapitalLand CommonStockAdditional Paid-InCapitalb.Assets= Liabilities+ Stockholders’ EquityContributed CapitalLand CommonStockAdditional Paid-InCapitalOn January 1, Amitroy Company had 20,000 shares of $5 par value common stock outstanding. The shares were originally issued at $12 per share. During the year, the following stock transactions occurred:March 4: The company reacquired 2,000 shares of its common stock at a cost of $12 per share.April 5: The company sold 1,000 shares of the treasury stock for $14 per share.July 9: The company sold the remaining 1,000 shares of the treasury stock for $11 per share.Required: 1. Record all the preceding transactions in one set of accounts for Amitroy.2. What is the final net effect on the accounts after these transactions are recorded? Why?1.Assets= Liabilities+ Stockholders’ EquityContributed CapitalCash Additional Paid-inCapital- Treasury Stock3/04-4/05-7/092. The records of the Lundgren Chemical Corporation show the following pretax items on December 31, 2011: Cost of goods sold $65,000Extraordinary loss from flood 2,250General and administrative expenses 12,000Interest revenue 700Interest expense 300Loss on sale of discontinued component Q 250Income from operations of discontinued componentQ800Selling expenses 23,000Sales 129,400Additional Information:a. There were 3,000 shares of common stock outstanding on January 1, 2011. Only July1, 2011, the corporation issued 6,000 common shares.b. The corporation paid dividends for the current year on 500 shares of 7%, $100 par preferred stock outstanding. Dividends of $6,000 were paid on common stock.c. The corporation is subject to a 40% income tax.Required: Prepare the income Statement of Lundgren Chemicals Corporation for 2011. (use empty page)During 2011, Herley Transport Corporation entered into the following long-term debt and capitalstock transactions:a. Issued 5,000 shares of common stock for $18 per share.b. Issued 1,000 shares of preferred stock for $110 per share.c. Reacquired 1,000 shares of common stock for $19 per share.d. Issued long-term bonds for $100,000.e. Paid interest of $10,000 on long-term bonds.f. Paid dividends of $16,000 on preferred stock.g. Paid