Fair value journal entries, trading investments
Fir Guarantee Financial, Inc., purchased the following trading securities during 2012, its first year of operations:
|
Name |
Number of shares |
Cost |
|
B&T Transportation, Inc. |
3,400 |
$74,200 |
|
Citrus Foods Inc. |
1,500 |
26,500 |
|
Stuart Housewares, Inc. |
800 |
45,200 |
|
Total |
$145,900 |
The market price per share for the trading security portfolio on December 31, 2012, was as follows:
|
Market Price per share |
|
|
Dec. 31, 2012 |
|
|
B & T Transportation, Inc. |
$26 |
|
Citrus Foods, Inc. |
19 |
|
Stuart Housewares, Inc. |
52 |
Assume that as of December 31, 2012, the Starlight Products, Inc., stock had a market value of $55 per share and the Reynokls Co. stock had a market value of $18 per share.
Newton Company had net income of $250,000, and paid no dividends for the year ending December 31, 2012.
a. Prepare the Current Assets section of the balance sheet presentation for the available for sale investments.
Prepare the Stockholder’s Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available for sale investments.
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