During January 2011, Pareto Glass Company purchased the following securities as
ID: 2470121 • Letter: D
Question
During January 2011, Pareto Glass Company purchased the following securities as its long-term securities available for sale investment portfolio:
1.
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2.
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Prepare the journal entries for the company for each year to record purchase of the investments. (Leave no cells blank; if there is no entry is required select "No journal entry required" from the dropdown and enter "0". Omit the "$" sign in your response.)
Prepare the journal entries for the company for each year to record income reported by D and F Corporations. (Leave no cells blank; if there is no entry is required select "No journal entry required" from the dropdown and enter "0". Omit the "$" sign in your response.)
Prepare the journal entries for the company for each year to record dividends and interest received from D and F Corporations. (Leave no cells blank; if there is no entry is required select "No journal entry required" from the dropdown and enter "0". Omit the "$" sign in your response.)
Prepare the journal entries for the company for each year to record fair value effects at year-end. (Leave no cells blank; if there is no entry is required select "No journal entry required" from the dropdown and enter "0". Omit the "$" sign in your response.)
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3.
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For each year, show how the following items and their amounts should be reported on the financial statements: (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)
During January 2011, Pareto Glass Company purchased the following securities as its long-term securities available for sale investment portfolio:
Explanation / Answer
No, common stock should not be recorded using equiyty method, as you do not have significant influence over D corporation, i.e holding is 12% approx (1140/96600), fair value method should be adopted
Bonds will be treated using fair value method, that is correct
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