Final Exam 07

Final Exam 07 - Accounting for Marketable Securities:...

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Accounting for Marketable Securities : [071Fa] Andrew Company was formed on January 1, Year 1 and has the following marketable securities portfolios. FMV means fair market value. The symbols are references to footnoted information for your use as appropriate. Fair Fair Fair Cost Market Market Market Basis Value Proceeds Value Proceeds Value End of End of Purchase s from SalesEnd of Purchase s from SalesEnd of Year 1: Year 1:in Year 2: in Year 2: Year 2:in Year 3: in Year 3: Year 3: Trading Securities $230 $305 $235 $340■ $210 $260 $285● $180 ■Original cost had been $280 ● Original cost had been $310 Fair Fair Fair Cost Market Market Market Basis Value Proceeds Value Proceeds Value End of End of Purchase s from SalesEnd of Purchase s from SalesEnd of Year 1: Year 1: in Year 2: in Year 2: Year 2:in Year 3: in Year 3: Year 3: Available For Sale Securities $130 $185 $60 $85♥ $165 $120 $95♣ $120 ♥ Original cost had been $55 ♣ Original cost had been $110 Question continued on next page. Accounting for Marketable Securities (continued) : [071Fa] Based on the information given above, what items would appear in the income statement of Andrew Company for the year ended December 31, Year 2 ? Place your answers in the Answer Booklet. Designate any number you show as gain or (loss). Trading Securities in Year 2: Realized gains/(losses) (if any): $_____________ Unrealized gains/(losses) (if any): $_____________ Available for Sale Securities in Year 2: Realized gains/(losses) (if any): $_____________
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Unrealized gains/(losses) (if any): $_____________ Based on the information given above, what items would appear in the income statement of Andrew Company for the year ended December 31, Year 3 ? Place your answers in the Answer Booklet. Designate any number you show as gain or (loss). Trading Securities in Year 3: Realized gains/(losses) (if any): $_____________ Unrealized gains/(losses) (if any): $_____________ Available for Sale Securities in Year 3: Realized gains/(losses) (if any): $_____________ Unrealized gains/(losses) (if any): $_____________ Question continued on next page. Based on the information given above, what items would appear in the owners’ equity section of the balance sheet of Andrew Company at December 31, Year 3 ? Place your answer in the Answer Booklet. Designate any number you show as gain or (loss). Available for Sale Securities in Owners’ Equity Section of Balance Sheet at the end of Year 3: Unrealized Gain/(Loss) (if any) $______________ Exam continued on next page. Accounting for Investments: Equity Method: [071Fa] Ally Company purchased 8,900 shares [31%] from some shareholders of Patrick Company for $3,660,000 cash at the start of Year 1. Immediately after the purchase of these shares by Ally Company, the companies had these owners’ equity account balances: Ally Patrick Company Company Contributed Capital $1,200,000 $2,800,000 Retained Earnings $3,900,000 $1,230,000
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This note was uploaded on 01/16/2009 for the course ARTL 100G taught by Professor Demers during the Fall '08 term at USC.

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Final Exam 07 - Accounting for Marketable Securities:...

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