Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Textbook Question
Chapter 15, Problem 15.4APR
Investment reporting
O'Brien Industries Inc. is a hook publisher. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 follow. Selected missing balances are shown by letters.
| ÓBrien Industries Inc. Balance Sheet December 31, Year 2 and Year 1 |
||
| Dec. 31, Year 2 | Dec 31, Year 1 | |
| cash | $233,000 | $220,000 |
| 136,530 | 138,000 | |
| Available for sale investments (at cost)—Note 1 | $ a | $103,770 |
| Less valuation allowance for available-for-sale investments | b. | 2,500 |
| Available for-sale investments (fair value) | $ c | $101,270 |
| Interest receivable | $ d | — |
| Investment in Jolly Roger Co. stock—Note 2 | e. | $ 77,000 |
| Office equipment (net) | 115,000 | 130,000 |
| Total assets | $ f. | $666,270 |
| Accounts payable | $ 69.400 | $ 65,000 |
| Common stock | 70.000 | 70,000 |
| Excess of issue price over par | 225,000 | 225,000 |
| g | 308,770 | |
| Unrealized gain (loss) on available for-sale investments | h. | (2,500) |
| Total liabilities and Stockholders’ equity | $ i. | $666,270 |
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows:
| No. of Shares | Cost per Share | Total Cost | Total Fair Value | |
| Bernard Co. stock | 2,250 | $17 | $ 38,250 | $ 37,500 |
| Chadwick Co. stock | 1,260 | 52 | 65,520 | 63,770 |
| $103,770 | $101,270 |
Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding .shares of Jolly Roger Co.
The following selected investment transactions occurred during Year 2:
| May 5. | Purchased 3,080 shares of Gozar Inc. at $30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security. |
| Oct. 1. | Purchased $40,000 of Nightline co. 6%, 10-Year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. |
| 9. | Dividends of $12,500 are received on the Jolly Roger co. investment. |
| Dec. 31 | Jolly Roger co. reported a total net income of $112,000 for year 2. O'Brien industries Inc. recorded equity earnings for its share of Jolly Roger co. net income. |
| 31. | Accrued three months of interest on the Nightline bonds. |
| 31. | Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: |
| Available-for-Sale Investments |
Fair Value |
| Bernard Co. stock | $15,40 per share |
| Chadwick Co. stock | $46,00 per share |
| Gozar Inc. stock | $32,00 per share |
| Nightline Co. bonds | $98 per $ 100 of face amount |
Dec. 31. Closed the O’Brien Industries Inc. net income of $146,230. O'Brien Industries Inc. paid no dividends during the year.
Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
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Investment Reporting
O'Brien Industries Inc. is a book publisher.
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows:
Cost per Share
Bernard Co. stock
Chadwick Co. stock
Year 2
May 5.
Oct. 1.
Oct. 9.
Dec. 31.
Dec. 31.
Dec. 31.
Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding shares of Jolly Roger Co.
The following selected investment transactions occurred during Year 2:
Available-for-Sale Investments
Bernard Co. stock
No. of Shares
Chadwick Co. stock
Dec.
31.
Gozar Inc. stock
1,600
Nightline Co. bonds
Required:
900
Purchased 1,900 shares of Gozar Inc. at $26 per share including brokerage commission. Gozar Inc. is classified as an available-for-
sale security.
Purchased $33,000 of Nightline Co. 5%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest
on October 1 and April 1.
Dividends of $9,000 are…
Current Attempt in Progress
XYZ provided the following financial information:
XYZBalance SheetAs of 12/31/19
Assets:
Liabilities and Equity:
Cash and marketable securities
$27,476
Accounts payable and accruals
$154,860
Accounts receivable
$143,519
Short-term notes payable
$21,255
Inventory
$212,379
Total current liabilities
$176,115
Total current assets
$383,374
Long term debt
$155,510
Net plant and equipment
$602,704
Total liabilities
$331,625
Goodwill and other assets
$42,422
Common stock
$312,719
Retained earnings
$384,156
Total assets
$1,028,500
Total liabilities and equity
$1,028,500
In addition, it was reported that the firm had a net income of:
$158,402
and net sales of:
$4,272,431
Calculate the following ratios for this firm (Use 365 days for calculation. Round answers to 2 decimal places, e.g.…
Harding Company
Accounts payable
Accounts receivable
Accrued liabilities
Cash
Intangible assets
Inventory
Long-term investments
Long-term liabilities
$33,881
67,862
6,549
24,569
44,827
81,635
119,652
79,434
27,140
Notes payable (short-term)
Property, plant, and equipment 665,660
Prepaid expenses
Temporary investments
1,979
38,326
Based on the data for Harding Company, what is the amount of working capital?
a.$663,681
b.$214,371
c.$146,801
d.$1,044,510
Chapter 15 Solutions
Accounting
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