Acct 510_Spring_2010: Exam 2
Question 1: (24 points)
The following information related to the marketable security investments of Marple
Securities held on December 31, 2009, as described in the table below.
and BBB are classified as trading securities and CCC is classified as an available-for-sale
No. of Shares
Early in 2010, Marple sold all of its investment in AAA securities for $36 per share. (a)
The company also sold 50 shares of BBB for $26 per share. (b) During 2010, Marple
received dividends of $3 per share on the remaining 200 shares of BBB, (c) and dividends
of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. (d)
The per-share market values of BBB and CCC on December 31, 2010, were $24 and $18,
respectively. (e) (f)
During 2011, Marple sold the remaining 200 shares of BBB stock for
$26 per share and the 150 shares of CCC for $22 per share. (g) (h)
Make Journal Entries for (a)-(h). Indicate whether each account is an asset (A), liability (L), or
equity (E) (3 points each)
Use the following accounts for gains and losses
Gain –RE, Loss–RE, Unrealized Gain–RE, Unrealized Loss–RE, Unrealized Gain–Acc OCI,
Unrealized Loss–Acc OCI, and Acc OCI.
Question 2: (16 points)
Agazzi Company purchased equipment for $440,000 on January 1
, 2010. It is estimated
that the equipment will have a useful life of 8 years and a salvage value of $40,000.