Chapter 15 in-class exercises

Chapter 15 in-class exercises - CHAPTER 15 INVESTMENTS AND...

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CHAPTER 15 INVESTMENTS AND FAIR VALUE ACCOUNTING EXERCISES Ex. 15–1 a. 2010 Sept. 1 Investments—Jericho Corp. Bonds. ........... 120,000 Cash. .......................................................... 120,000 b. 2010 Dec. 31 Interest Receivable. ....................................... 2,400 Interest Revenue. ..................................... 2,400 Accrued interest, $120,000 × 6% × 4/12. c. 2011 Mar. 1 Cash. ............................................................... 3,600 Interest Receivable. ................................. 2,400 Interest Revenue. ..................................... 1,200* *$120,000 × 6% × 2/12 d. 2011 Mar. 1 Cash. ............................................................... 40,800* Gain on Sale of Investments. .................. 800 Investments—Jericho Corp. Bonds. ... 40,000 *$40,000 × 102%
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Ex. 15–2 a. 2010 July 12 Investments—Bergen County Bonds. ........ 36,000 Interest Receivable. ....................................... 432* Cash. .......................................................... 36,432 *$36,000 × 6% × 72/360 b. May 1 Cash. ............................................................... 1,080* Interest Receivable. ................................. 432 Interest Revenue. ..................................... 648 *$36,000 × 6% × ½ Nov. 1 Cash. ............................................................... 1,080 Interest Revenue. ..................................... 1,080 c. Dec. 1 Cash. ............................................................... 14,050* Loss on Sale of Investments. ....................... 20 Interest Revenue. ..................................... 70 Investments—Bergen County Bonds. ... 14,000 *Bond sale ($14,000 × 1.02). ........................... $14,280 Accrued interest. ........................................... 70 Less brokerage commission. ....................... (300 ) Total proceeds. .............................................. $14,050 d. Dec. 31 Interest Receivable. ....................................... 220 Interest Revenue. ..................................... 220 To accrue interest.
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Ex. 15–6 Jan. 12 Investments—Baxter Company Stock. ....... 101,790* Cash. .......................................................... 101,790 *(1,800 shares × $56.50) + $90 Apr. 10 Cash. ............................................................... 450* Dividend Revenue. ................................... 450 *($0.25 × 1,800 shares) June 3 Cash. ............................................................... 55,135* Loss on Sale of Investments. ....................... 12,725 Investments—Baxter Company Stock. .. 67,860** *(1,200 shares × $46) – $65 **1,200 shares × ($101,790/1,800 shares) Ex. 15–7 Feb. 2 Investments—Devon Inc. Stock. .......................... 49,050* Cash. .................................................................. 49,050 *(900 shares × $54) + $450 Apr. 16 Cash. ....................................................................... 225* Dividend Revenue. ........................................... 225
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This note was uploaded on 11/25/2010 for the course BUSINESS bus 100 taught by Professor Jones during the Spring '10 term at Thomas Edison State.

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Chapter 15 in-class exercises - CHAPTER 15 INVESTMENTS AND...

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