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9echapter16Bsolutions - PROBLEM 16-2B(a Feb 1 30,800 Mar 1...

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PROBLEM 16-2B (a) Feb. 1 Stock Investments ....................................... 30,800 Cash ($30,000 + $800) ......................... 30,800 Mar. 1 Stock Investments ....................................... 20,300 Cash ($20,000 + $300) ......................... 20,300 Apr. 1 Debt Investments ......................................... 41,200 Cash ($40,000 + $1,200) ...................... 41,200 July 1 Cash ($.60 X 500) ......................................... 300 Dividend Revenue ................................ 300 Aug. 1 Cash ($20,700 – $350) ................................. 20,350 Gain on Sale of Stock Investments... 1,870 Stock Investments [($30,800 ÷ 500) X 300] ..................... 18,480 Sept. 1 Cash ($1 X 600) ............................................ 600 Dividend Revenue ................................ 600 Oct. 1 Cash ($40,000 X 9% X 1/2) .......................... 1,800 Interest Revenue .................................. 1,800 1 Cash ($45,000 – $1,000) .............................. 44,000 Debt Investments ................................. 41,200 Gain on Sale of Debt Investments
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($45,000 – $41,200) ........................... 2,800 Stock Investments Debt Investments Feb. 1 30,800 Mar. 1 20,300 Aug. 1 18,480 Apr. 1 41,200 Oct. 1 41,200 Dec. 31 Bal. 32,620 Dec. 31 Bal. 0
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PROBLEM 16-2B (Continued) (b) Dec. 31 Unrealized Loss—Income ......................... 2,020 Market Adjustment—Trading ............ 2,020 Security Cost Fair Value DET common STL common $12,320 20,300 $32,620 $13,200 17,400 $30,600 (200 X $66) (600 X $29) (c) Current assets Trading securities, at fair value ......................................... $30,600 (d) Income Statement Account Category Dividend Revenue Other revenues and gains Gain on Sale of Stock Investments Other revenues and gains Interest Revenue Other revenues and gains Gain on Sale of Debt Investments Other revenues and gains Unrealized Loss—Income Other expenses and losses
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