During 2014, its first year of operations, Myron Company purchased two available
ID: 2445249 • Letter: D
Question
During 2014, its first year of operations, Myron Company purchased two available-for-sale investments as follows:
Security Shares Purchased Cost
Olson Products, Inc. 660 $25,608
Reynolds Co. 1,790 36,158
Assume that as of December 31, 2014, the Olson Products, Inc., stock had a market value of $46 per share and the Reynolds Co. stock had a market value of $36 per share. Myron Company had net income of $198,300, and paid no dividends for the year ending December 31, 2014. All of the available-for-sale investments are classified as current assets.
a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.
Myron Company
Balance Sheet (selected Current Asset items)
December 31, 2014
Assets
Current Assets:
Available-for-Sale Investments, at Cost
Available-for-Sale Investments, at Fair Value
Common Stock
Retained Earnings
Unrealized Gain (Loss) on Available-for-Sale Investments
Correct 6 of Item 1
Correct 7 of Item 1
Less Retained Earnings
Less Unrealized Gain (Loss) on Available-for-Sale Investments
Less Valuation Allowance for Available-for-Sale Investments
Plus Retained Earnings
Plus Unrealized Gain (Loss) on Available-for-Sale Investments
Plus Valuation Allowance for Available-for-Sale Investments
Correct 8 of Item 1
Correct 9 of Item 1
Correct 10 of Item 1
b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
Myron Company
Balance Sheet (selected Stockholders' Equity items)
December 31, 2014
Stockholders' Equity
Available-for-Sale Investments, at Cost
Available-for-Sale Investments, at Fair Value
Common Stock
Valuation Allowance for Available-for-Sale Investments
Retained Earnings
Correct 5 of Item 2
Correct 6 of Item 2
Available-for-Sale Investments, at Cost
Available-for-Sale Investments, at Fair Value
Common Stock
Valuation Allowance for Available-for-Sale Investments
Unrealized Gain (Loss) on Available-for-Sale Investments
Correct 7 of Item 2
Myron Company
Balance Sheet (selected Current Asset items)
December 31, 2014
Assets
Current Assets:
Available-for-Sale Investments, at Cost
Available-for-Sale Investments, at Fair Value
Common Stock
Retained Earnings
Unrealized Gain (Loss) on Available-for-Sale Investments
Correct 6 of Item 1
$Correct 7 of Item 1
Less Retained Earnings
Less Unrealized Gain (Loss) on Available-for-Sale Investments
Less Valuation Allowance for Available-for-Sale Investments
Plus Retained Earnings
Plus Unrealized Gain (Loss) on Available-for-Sale Investments
Plus Valuation Allowance for Available-for-Sale Investments
Correct 8 of Item 1
Correct 9 of Item 1
$Correct 10 of Item 1
Explanation / Answer
Answer:a Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.
Answer:b
Particulars Amount ($) Available-for-sale investments, at cost 61766 Plus valuation allowance for available-for-sale investments 33034 Total 94800Related Questions
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