On December 31, 2008, Ramey Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Common Stock| Shares| Cost|
Hurst Co.| 2000| $60000|
Pine Co.| 5000| $45000|
Scott Co.| 1500| $30000|
On December 31, 2008, the total fair value of the securities was equal to its cost. In 2009, the following transactions occurred. July 1Received $1 per share semiannual cash dividend on Pine Co. common stock. Aug 1Received $0.50 per share cash dividend on Hurst Co. common stock. Sept 1Sold 1,500 shares of Pine Co. common stock for cash at $8 per share, less brokerage fees of $300. Oct 1Sold 800 shares of Hurst Co. common stock for cash at $33 per share, less brokerage fees of $500. Nov 1Received $1 per share cash dividend on Scott Co. common stock. Dec 15Received $0.50 per share dividend on Hurst Co. common stock. Dec 31Received $1 per share semiannual cash dividend on Pine Co. common stock. At December 31, the fair values per share of common stocks were: Hurst Co. $32, Pine Co. $8, and Scott Co. $18. Instructions
a. Journalized the 2009 transactions and post to the account Stock Investments. (use the T-account form.) b. Prepare the adjusting entry at December 31, 2009, to show the securities at fair value. The stock should be classified as available for sale securities. c. Show the balance sheet presentation of the investments at December 31, 2009. At this date, Ramey Associates has common stock $1,500,000 and retained earnings $1000,000.
Date| Transactions| Debit| Credit|
June 1, 2009| Cash| | $ 5,000 | |
| | Divedend revenue(5000shx$1)| | $ 5,000 | August 1, 2009| Cash| | $ 1,000 | |
| | Divedend revenue(2000shx$0.5)| | $ 1,000 | September 1, 2009| Cash| | | |
| Loss on sale of stock investment| $ 11,700 | |...