Assessing Financial Statement Effects of Marketable Equity Securities Use the financial statement effects template to record the following four transactions involving investments in marketable equity securities. Assume that these transactions occur in 2018.
Purchased 18,000 common shares of Baez, Inc., at $12 cash per share.
Received a cash dividend of $1.20 per common share from Baez.
Year-end market price of Baez common stock is $11.25 per share.
Sold all 18,000 common shares of Baez for $213,600.
Use negative signs with your answers, when appropriate.
Balance Sheet
Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
(1) Answer Answer Answer Answer Answer
(2) Answer Answer Answer Answer Answer
(3) Answer Answer Answer Answer Answer
(4) Answer Answer Answer Answer Answer
Income Statement
Revenue - Expenses = Net Income
Answer Answer Answer
Answer Answer Answer
Answer Answer Answer
Answer Answer Answer
Marketable Debt Securities
Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. Assume that these transactions occur in 2016 (before the new rules for securities went into effect).
a. Loudder Inc. purchases 5,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%.
b. Loudder receives semi-annual cash interest of $200,000.
c. Year-end fair value of the bonds is $978 per bond.
d. Shortly after year-end, Loudder sells all 5,000 bonds for $970 per bond.
Use negative signs with answers, if appropriate.
Balance Sheet Income Statement
Noncash Contrib. Earned
Transaction Cash Asset + Assets = Liabilities + Captial + Capital Revenues - Expenses = Net income
Loudder purchases bonds. Answer Answer Answer Answer Answer Answer Answer Answer
Loudder receives cash interest. Answer Answer Answer Answer Answer Answer Answer Answer
Bonds year-end fair value is determined. Answer Answer Answer Answer Answer Answer Answer Answer
Loudder sells all bonds Answer Answer Answer Answer Answer Answer Answer Answer