ORIE_350_Homework__7_2008 - ORIE 350 Homework #7 Due March...

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ORIE 350 Homework #7 Due March 12, 2008 1. Ian Craig Co. purchased 20,000 shares of Earl-Bush Co. stock on January 17, 2006, at $12 per share. On December 31, 2006, the market value for the Earl-Bush Co. shares was $14 per share. On February 17, 2007, Ian Craig Co. received a $.10 per share dividend on the Earl-Bush Co. stock. On July 11, 2007, Ian Craig Co. sold 2,500 shares of Earl-Bush Co. stock for $13 per share. At the end of 2007, the market value for the Earl-Bush Co. stock was $17 per share. a. Give the journal entries to record for the transactions during each year and the year- end adjusting entries for Ian Craig for 2006 and 2007. These securities are classified as trading securities. b. What would Ian Craig Co. report on its income statements for 2006 and 2007 relating to its investment in marketable securities? 2. DeWitt Corporation reported the following items on its December 31, 2007 balance sheet: Current Assets Marketable Securities $510,000 Shareholders' Equity Accumulated Other Comprehensive Income (Unrealized Holding Loss on Securities Available for Sale) $82,000 A note to the balance sheet indicates that the "Unrealized Holding Loss" account increased by $35,000 in fiscal 2007. a. What is the cost of the marketable securities? b. What was the market value of the marketable securities on December 31, 2006? 3. Demry Corp. reported the following item on its December 31, Year 2 balance sheet: Current Assets Marketable Securities $390,000 The marketable securities consist of 10,000 shares of Gibb Corporation stock, which
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ORIE_350_Homework__7_2008 - ORIE 350 Homework #7 Due March...

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