d Identify the income statement accounts and give the statement classification

D identify the income statement accounts and give the

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(d) Identify the income statement accounts and give the statement classification of each account. P12-3A On December 31, 2011, Ramey Associates owned the following securities, held as a long-term investment.The securities are not held for influence or control of the investee. Common Stock Shares Cost Hurst Co. 2,000 $60,000 Pine Co. 5,000 45,000 Scott Co. 1,500 30,000 On December 31, 2011, the total fair value of the securities was equal to its cost. In 2012, the fol- lowing transactions occurred. July 1 Received $1 per share semiannual cash dividend on Pine Co. common stock. Aug. 1 Received $0.50 per share cash dividend on Hurst Co. common stock. Sept. 1 Sold 1,500 shares of Pine Co. common stock for cash at $8 per share, less brokerage fees of $300. Oct. 1 Sold 800 shares of Hurst Co. common stock for cash at $33 per share, less brokerage fees of $500. Nov. 1 Received $1 per share cash dividend on Scott Co. common stock. Dec. 15 Received $0.50 per share cash dividend on Hurst Co. common stock. 31 Received $1 per share semiannual cash dividend on Pine Co. common stock. At December 31, the fair values per share of the common stocks were: Hurst Co. $32, Pine Co. $8, and Scott Co. $18. Instructions (a) Journalize the 2012 transactions and post to the account Stock Investments. (Use the T-account form.) (b) Prepare the adjusting entry at December 31, 2012, to show the securities at fair value. The stock should be classified as available-for-sale securities. (c) Show the balance sheet presentation of the investments at December 31, 2012. At this date, Ramey Associates has common stock $1,500,000 and retained earnings $1,000,000. P12-4A Glaser Services acquired 30% of the outstanding common stock of Nickels Company on January 1, 2011, by paying $800,000 for the 45,000 shares. Nickels declared and paid $0.30 per share cash dividends on March 15, June 15, September 15, and December 15, 2011. Nickels reported net income of $320,000 for the year.At December 31, 2011, the market price of Nickels common stock was $24 per share. Instructions (a) Prepare the journal entries for Glaser Services for 2011 assuming Glaser cannot exercise sig- nificant influence over Nickels. (Use the cost method and assume that Nickels common stock should be classified as a trading security.) (b) Prepare the journal entries for Glaser Services for 2011, assuming Glaser can exercise signif- icant influence over Nickels. Use the equity method. (c) Indicate the balance sheet and income statement account balances at December 31, 2011, under each method of accounting. P12-5A The following securities are in Pascual Company’s portfolio of long-term available- for-sale securities at December 31, 2011. Cost 1,000 shares of Abel Corporation common stock $52,000 1,400 shares of Frey Corporation common stock 84,000 1,200 shares of Weiss Corporation preferred stock 33,600 600 Chapter 12 Investments (a) Gain on stock sale $600 (b) Unrealized loss $4,100 (b) Revenue from investments $96,000 Journalize transactions and adjusting entry for stock investments.
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