PROBLEM 12-4A (Continued)
Dec. 31 Stock Investments ………………………….. 64,000
(c)
Cost
Method
Equity
Method
Stock Investments
Unrealized gain-equity
Dividend revenue
Revenue from stock investments
**$34 X 30,000 shares
**$800,000 + $64,000 – $36,000
$1,020,000*
220,000
36,000
0
$828,000**
0
0
64,000
PROBLEM 12–5A
(a) Jan. 20 Cash …………………………………………………. 55,000
28 Stock Investments …………………………….. 31,200
30 Cash …………………………………………………. 1,610
Feb. 8 Cash …………………………………………………. 480
18 Cash ($27 X 1,200) …………………………….. 32,400
July 30 Cash …………………………………………………. 1,400
Sept. 6 Stock Investments …………………………….. 73,800
Dec. 1 Cash …………………………………………………. 1,950
(b)
Stock Investments
1/1 Bal. 169,600
1/20 52,000
1/28 31,200
2/18 33,600
9/6 73,800
12/31 Bal. 189,000
PROBLEM 12-5A (Continued)
(c) Dec. 31 Unrealized Gain or Loss—Equity ……………. 5,800
Security
Cost
Fair Value
Hutcherson Corporation common
Liggett Corporation common
$ 84,000
105,000
$189,000
$ 89,600
93,600
$183,200
((1,400 X $64)
((1,300 X $72)
(d) Investments
Stockholders’ equity
Total paid-in capital and retained earnings ……………. xxxxx
PROBLEM 12–6A
NIETO CORPORATION
Balance Sheet
December 31, 2015
Assets
Current assets
Cash ………………………………………………………. $ 62,000
Short-term investments, at fair value ……….. 180,000
Investments
Investments in stock of less than 20% of
Property, plant, and equipment
Land …………………………………………… 390,000
PROBLEM 12-6A (Continued)
NIETO CORPORATION
Balance Sheet (Continued)
December 31, 2015
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable ………………………………………….. $ 70,000
Accounts payable …………………………………….. 260,000
Long-term liabilities
Bonds payable, 10%, due 2023 ………………….. $ 500,000
Stockholders’ equity
Paid-in capital
Common stock, $10 par value,
500,000 shares authorized,
150,000 shares issued and
*PROBLEM 12-7A
(a)
2015
Dec. 31
Stock Investments
1,225,000
Current Assets
1,225,000
(b)
ROBINSON CORPORATION AND SUBSIDIARY
Worksheet—Consolidated Balance Sheet
December 31, 2015
Robinson
Corporation
Hoffman
Plastics
Eliminations
Consolidated
Data
Assets
Dr.
Cr.
Current assets
255,000
435,500
690,500
Investment in
Hoffman Plastics
common stock
1,225,000
1,225,000
0
Plant and equipment
(net)
2,100,000
676,000
86,000
2,862,000
Excess of cost over
book value of
subsidiary
120,000
120,000
Totals
3,580,000
1,111,500
3,672,500
Liabilities and
Stockholders’ Equity
Current liabilities
578,000
92,500
670,500
Common stock—
Robinson
Corporation
1,950,000
1,950,000
Common stock—
Hoffman Plastics
525,000
525,000
0
Retained earnings—
Robinson
Corporation
1,052,000
1,052,000
Retained earnings—
Hoffman Plastics
494,000
494,000
0
Totals
3,580,000
1,111,500
1,225,000
1,225,000
3,672,500
*PROBLEM 12-7A (Continued)
(c)
ROBINSON CORPORATION AND SUBSIDIARY
Consolidated Balance Sheet
December 31, 2015
Assets
Current assets ………………………………………….
$ 690,500
Plant and equipment, net …………………………..
2,862,000
Goodwill …………………………………………………..
120,000
Total assets ……………………………………….
$3,672,500
Liabilities and Stockholders’ Equity
Current liabilities ………………………………………
$ 670,500
Stockholders’ equity
Common stock …………………………………..
$1,950,000
Retained earnings ………………………………
1,052,000
3,002,000
Total liabilities and
stockholders’ equity …………………….
$3,672,500
PROBLEM 12–1B
(a) 2015
Jan. 1 Debt Investments …………………………... 400,000
July 1 Cash ($400,000 X .09 X 1/2) …………….. 18,000
Dec. 31 Interest Receivable ………………………… 18,000
2018
Jan. 1 Cash ……………………………………………… 18,000
1 Cash ($200,000 X 1.14) …………………… 228,000
July 1 Cash ($200,000 X .09 X 1/2) …………….. 9,000
Dec. 31 Interest Receivable ………………………… 9,000
(b) 2015
Dec. 31 Unrealized Gain or Loss—Equity ……. 15,000
PROBLEM 12-1B (Continued)
(c) Balance Sheet
Current assets
Investments
capital and retained earnings.
PROBLEM 12–2B
(a) Feb. 1 Stock Investments ………………………………. 30,800
Mar. 1 Stock Investments ………………………………. 20,300
Apr. 1 Debt Investments ………………………………… 40,000
Aug. 1 Cash (300 X $69) …………………………………. 20,700
Sept. 1 Cash ($1 X 600) …………………………………… 600
Oct. 1 Cash ($40,000 X 9% X 1/2) ……………………. 1,800
1 Cash …………………………………………………… 44,000
Stock Investments
Debt Investments
Feb. 1 30,800
Mar. 1 20,300
Aug. 1 18,480
Apr. 1 40,000
Oct. 1 40,000
Dec. 31 Bal. 32,620
Dec. 31 Bal. 0