Accounting Help Please

CHAPTER 16 ASSIGNMENT

Instructions: Complete the problems below. This assignment can be completed in either: Microsoft Excel, Word, or hand-written and scanned in PDF format. I prefer Microsoft Excel or Word but will not dock points for PDF format.

PART A. For problems 1-5: On January 1, 2013, the company purchases ten 6%, 5-year, $10,000 bonds for $105,000, including brokerage fees of $2,000. The bonds pay interest semi-annually on July 1 and January 1. Prepare the journal entries for the following:

1. Purchase of the bonds.

2. Receipt of interest on July 1, 2013.

3. Year-end accrual of interest on December 31, 2013.

4. Receipt of interest on January 1, 2014.

5. On January 1, 2016, the company sells the bonds, after receiving interest due, for $108,000.

PART B. For problems 6-9: On January 1, 2013, the company purchases 40% of the common stock of A Corp. for $300,000. Prepare the journal entries for the following:

6. Purchase of the stock.

7. A Corp. declares and pays the company a $30,000 cash dividend on July 1, 2013.

8. On December 31, 2013, A Corp. reports net income of $80,000.

9. What amount would the company report as Stock Investments on its balance sheet as of December 31, 2013?

PART C. For problems 10-13: On January 1, 2013, the company purchases 10,000 shares (10% ownership) of the common stock of B Corp. for $5 per share plus brokerage fees of $1,000. Prepare the journal entries for the following:

10. Purchase of the stock.

11. B Corp. declares and pays the company a $5,000 dividend on July 1, 2013.

12. On December 31, 2013, B Corp. reports net income of $100,000.

13. On January 1, 2014, the company sells the stock for $40,000.

PART D. For problems 14-15: Assume the company owns 10% of the stock in C Corp. The current cost on the company’s books for the investment is $10,000. Prepare the journal entries for the following (separate situations):

14. The market value on December 31 is $12,000 and the company considers them trading securities.

15. The market value on December 31 is $8,000 and the company considers them available-for-sale securities.

PART E. For problems 16-25: Identify which section of the classified balance sheet each of the following belongs. (Be specific, simply stating “Assets” is not a correct answer. Instead, the answer may be “Property, plant, and equipment”)

16. Market adjustment – trading security

17. Unrealized gain on available-for-sale security

18. Unrealized loss on trading security

19. Common stock

20. Stock Investment (less than 20% ownership)

21. Revenue from Stock Investment

22. Loss on Sales of Stock Investment

23. Dividend Revenue

24. Debt Investments

25. Cash