the 4 last tutors have been wrong. 202 Rams Company purchased the following rela
ID: 2607509 • Letter: T
Question
the 4 last tutors have been wrong.
202 Rams Company purchased the following relatively long-e classiied as avarlable-for-sale securities Alternate Problems 1. Two thousand shares of Lacey Company capital stock at $439.20 plus brokers 2 One thousand shares of Membrow Company capital stock at $705.60 plus broker's Cash dividends of S18.00 per share on the Lacey capital stock and S14.40 per share on the Membrow capital stock were received on December 7 and December 10, respectively. On December 31,2012 per share market values are Lacey, $460.80; and Membrow, S655.20. Prepare journal entries to record these transactions. h. Prepare the necessary adjusting entry(ies) at December 31, 2012, to adjust the carrying values assuming that market price changes are believed to be temporary. Where would the accounts appear in the financial statements?Explanation / Answer
a) Journal Entries :
b) The Available for Sale securities accounts appear under the Current Assets in the Assets column.
The Cash and Unrealised Loss on revaluation would appear on Assets side.
Dividend income appear in the Income statement.
Date Accounts Titles & description Debit $ Credit $ Sep 1 12 Available for Sale - Lacey 878400 Available for Sale - Membrow 705600 Brokerage expenses 10800 Cash 1594800 (purchsed2000 lacey at $439.20 & 1000 membrow at $705.60) Dec 7 Cash 36000 Dividend income 36000 Dec 10 Cash 14400 Dividend income 14400 Dec 31 12 Available for Sale - Lacey 43200 Unrealised Loss on revaluation 7200 Available for Sale - Membrow 50400 (being revaluation of shares at year end Lacey at $460.80 & Membrow at $655.20)Related Questions
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