Date Problems (30 pts) 2015. Weston had several long-term investment transaction

Question

Date Problems (30 pts) 2015. Weston had several long-term investment transactions during the next 2 years. After analyzing the effecets of each transaction. (17 pts) 1. Weston Company had the following long-term available-for-sale securities in its portolio at December 31. Dec 31, 2015: Available-for-Sale Securities (LT) 27,500 shares of A common stock 15,000 shares of B common stock 18,000 shares of C common stock Cost $559,125 410.200 399,600 Fair Value $599,063 435,600 403,500 2016 Transactions an. 22 Sold 9,000 shares of C common stock for $203,00 1ssa bokenge feeof s50. Purchased 30,000 shares of D common stock for $995,000 plus a shares represent a 15% ownership in D. Purchased 108,000 shares of E common stock The shares represent a 4% ownership in E. Purchased 12,000 shares of F common st shares represent a 10% ownership. brokerage fee of $2,500. The Mar. 17 Jun. 10 Nov. 01 e At December 31, 2016, the fair values of its investments are: A, ss for $1.525,000 plusa brokerage fee of $4 ,200. ock for $223,500 pl us a brokerage fee of S450. The $205.300: D, S1.113.250: E. $1.576.000: F. $224,750 7 Transactions: 22 Sold 9,000 shares of C common stock for $195,000 less a brokerage fee of $850. 17 Sold 27,500 shares of A common stock for $565,00 less a brokerage fee of $4,200. 01 Sold 12,000 shares of F common stock for $220,000 less a brokerage fee of $600. At December 31,2017, the fair values of its investments are: B,$407,500; D, 980,123; E $1,525,750 Page 1 of 5

Explanation / Answer

a.

b.

2016 entries:

Workings:

Purchase cost includes brokerage fee. Sale proceeds is net of brokerage fee.

2017 Entry:

Workings:

c.

workings:

Realised gain/(loss) 2016 Security Shares Cost Cost per share Shares sold cost of shares sold Sale proceeds,net Realised gain/(loss) a b c=b/a d e=c*d f g=f-e C 18000 399600 22.2000 9000 1,99,800.00 202150      2,350.00 2017 Security Shares Cost Cost per share Shares sold cost of shares sold Sale proceeds,net Realised gain/(loss) a b c=b/a d e=c*d f g=f-e C 18000 399600 22.2000 9000 1,99,800.00 194150 -5,650.00 A 27500 559125 20.3318 27500 5,59,125.00 560800 1,675.00 F 12000 223950 18.6625 12000 2,23,950.00 219400 -4,550.00

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