1. The Janjua Company had the following account balances at 1/1/16: Common Stock
ID: 2484995 • Letter: 1
Question
1. The Janjua Company had the following account balances at 1/1/16: Common Stock
$75,000
Treasury Stock (at cost)
15,000
Paid-in-Capital in Excess of Par
150,000
Investments in AFS Equity Securities
35,000
FVA (AFS)
1,500 debit
Retained Earnings 25,000
On that date, the Accumulated OCI account was at its proper balance.
There were no sales or purchases of Common Stock of Investments during 2016. Prior to any adjusting journal entries related to the investments, 2016 Net Income was $7,600. No other transactions affecting Retained Earnings occurred. Fair Value of the Investments at 12/31/2016 was $33,700.
(a) Prepare the 12/31/16 journal entry to adjust the investment to fair value.
(b) Prepare the 12/31/16 Equity section of the balance sheet.
1. The Janjua Company had the following account balances at 1/1/16: Common Stock
$75,000
Treasury Stock (at cost)
15,000
Paid-in-Capital in Excess of Par
150,000
Investments in AFS Equity Securities
35,000
FVA (AFS)
1,500 debit
Retained Earnings 25,000
On that date, the Accumulated OCI account was at its proper balance.
There were no sales or purchases of Common Stock of Investments during 2016. Prior to any adjusting journal entries related to the investments, 2016 Net Income was $7,600. No other transactions affecting Retained Earnings occurred. Fair Value of the Investments at 12/31/2016 was $33,700.
(a) Prepare the 12/31/16 journal entry to adjust the investment to fair value.
(b) Prepare the 12/31/16 Equity section of the balance sheet.
Explanation / Answer
We have been provided with the information as follow
(a) Prepare the 12/31/16 journal entry to adjust the investment to fair value.
2
(b) Prepare the 12/31/16 Equity section of the balance sheet.
Janjua Corporation 1/1/2016 12/31/2016 Common Stock 75000 75000 Treasury Stock (at cost) 15000 15000 Paid-in-Capital in Excess of Par 150000 1500000 Investments in AFS Equity Securities 35000 33700 FVA (AFS) -1500 Retained Earnings 25000 Net profit 7600Related Questions
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