1. The Janjua Company had the following account balances at 1/1/16: Common Stock $50,000 Treasury Stock...
1. The Janjua Company had the following account balances at 1/1/16: Common Stock $50,000 Treasury Stock (at cost) 12,000 Paid-in-Capital in Excess of Par 200,000 Investments in AFS Equity Securities 37,000 FVA (AFS) 2,500 credit Retained Earnings 35,000 On that date, the Accumulated OCI account was at its proper balance. There were no sales or purchases of Common Stock or Investments during 2016. Prior to any adjusting journal entries related to the investments, 2016 Net Income was $7,800. No other transactions affecting Retained Earnings occurred. Fair Value of the Investments at 12/31/2016 was $34,700. Required: (a) Prepare the 12/31/16 journal entry to adjust the investment to fair value. (b) Prepare the complete 12/31/16 Equity section of the balance sheet.
Homework Answers
a.
| Date | Account Titles and Explanation | Debit $ | Credit $ |
| 12/31/16 | FVA(AFS) | 4800 | |
| Unrealized Holding Gain/Loss–Trading | 4800 | ||
| (37000+2500-34700) |
b.
| Equity Section | Amount |
| Common Stock | $50,000 |
| Paid-in-Capital in Excess of Par | 200000 |
| Retained Earnings | 35000 |
| Add: | |
| Net profit for the year | 7800 |
| Total | $292,800 |
| Less: | |
| Treasury Stock (at cost) | 12000 |
| Total Shareholder's equity | $280,800 |
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Problem 14-04A (Video)
On January 1, 2020, Pharoah Inc. had the following stockholders'
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issued)
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Common Stock Dividends
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Retained Earnings
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1.
Issued 70,000 shares of $2 par value common stock as a result
of 15% stock dividend declared on December 15, 2021.
2.
Issued 35,000 shares of common stock for cash at $4 per
share....
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Problem 14-04A (Video)
On January 1, 2020, Pharoah Inc. had the following stockholders'
equity balances.
Common Stock (480,000 shares
issued)
$960,000
Paid-in Capital in Excess of
Par-Common Stock
560,000
Common Stock Dividends
Distributable
140,000
Retained Earnings
520,000
During 2020, the following transactions and events occurred.
1.
Issued 70,000 shares of $2 par value common stock as a result
of 15% stock dividend declared on December 15, 2021.
2.
Issued 35,000 shares of common stock for cash at $4 per
share....
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