Acc 423 Week 3 Wileyplus Assignment - Exercises

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ACC 423 Week 3 WileyPlus Assignment - Exercises
Business - Accounting

E17-7 (Trading Securities Entries) On December 21, 2010, Zurich Company provided you with the following information regarding its trading securities.

December 31, 2010
Investments(Trading) Cost Fair Value Unrealized Gain (Loss)
Stargate Corp. stock $20,000 $19,000 $(1,000)
Carolina Co. stock 10,000 9,000 (1,000)
Vectorman Co. stock 20,000 20,600 600
Total Portfolio $50,000 $48,600 (1,400)
Previous securities fair value adjustment balance -0-
Securities fair value adjustment—Cr. $(1,400)
During 2011, Carolina Company stock was sold for $9,500. The fair value of the stock on December 31, 2011, was: Stargate Corp. stock-$19,300; Vectorman Co. stock-$20,500. (a) Prepare the adjusting journal entry needed on December 31, 2010. (b) Prepare the journal entry to record the sale of the Carolina Company stock during 2011. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.) (c) Prepare the adjusting journal entry needed on December 31, 2011.

E17-12 (Journal Entries for Fair Value and Equity Methods) Presented below are two independent situations.

Situation 1
Hatcher Cosmetics acquired 10% of the 200,000 shares of common stock of Ramirez Fashion at a total cost of $14 per share on March 18, 2010. On June 30, Ramirez declared and paid a $75,000 cash dividend. On December 31, Ramirez reported net income of $122,000 for the year. At December 31, the market price of Ramirez Fashion was $15 per share. The securities are classified as available-for-sale.

Situation 2
Holmes, Inc. obtained significant influence over Nadal Corporation by buying 25% of Nadal's 30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2010. On June 15, Nadal declared and paid a cash dividend of $36,000. On...
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