Student Name:
Class:
Requirement 1:
Date Account Debit Credit
Trading Portfolio Entries:
March 1, 2011 Investments in TS 136,000 «- Correct!
Cash 136,000
Net unrealized losses/gains 40,000
Requirement 2:
Available-for-Sale Portfolio Entries:
March 1, 2011 Investments in SAS 136,000 «- Correct!
Cash 136,000
December 31, 2011 Net unrealized losses/gains 16,000 «- Correct!
Investments in SAS 16,000
Problem 12-02
McGraw-Hill/Irwin
Instructor
General Journal
LIGHTING TECHNOLOGY
Date of purchase 3/1/2011
Shares purchased 8,000
Price per share 17$
Date Stock Price
12/31/2011 15
Given P12-02:
Computing Services Company Stock
Computing Services Company
Stock Purchase:
LIGHTING TECHNOLOGY
Problem 12-05
McGraw-Hill/Irwin
Instructor
General Journal
GLENN CORPORATION
Date of purchase 8/4/2012
Shares purchased 3,000
Price 150,000$
Date Stock Price
12/31/2012 57
Riley Company Stock
Given P12-05:
Riley Company
Stock Purchase:
GLENN CORPORATION
Student Name:
Class:
Requirement 1:
Accounting method Company D should use
Case A :
Case B :
Requirement 2:
Account Debit Credit Debit Credit
a. January 1, 2011 purchase:
Investments in SAS 75,000 «- Correct!
Case B-35%
Problem 12-06
McGraw-Hill/Irwin
Instructor
The equity method must be used by Company P because it owns 35% (8,750 / 25,000) of
COMPANY P
General Journal
COMPANY P
Case A-12%
Student Name:
Class:
Problem 12-06
McGraw-Hill/Irwin
Instructor
b. Income reported by Company C:
Investments in affiliates 15,750 «- Correct!
Equity in affiliate earnings 15,750
c. Dividends declared and paid by Co. C:
Cash 1,980 «- Correct!
Student Name:
Class:
Problem 12-06
McGraw-Hill/Irwin
Instructor
Requirement 3:
Schedule Case A Case B
Balance Sheet:
Investments:
Investment in SAS 66,000 «- Correct!
Investment in affiliates 228,725 «- Correct!
Requirement 4:
Explanation
Assets (investments), stockholders’ equity (retained earnings), and revenues (from
Purchased Company T stock:
Date of purchase 1/1/2011
Price per share 25$
COMPANY P
Given P12-06:
Student Name:
Class:
Requirement 1:
Accounting method Dock Company should use
Case A :
Case B :
Requirement 2:
Account Debit Credit Debit Credit
a. January 1, 2011 purchase:
Investments in SAS 200,000 «- Correct!
Cash 200,000
Investments in affiliates 800,000 «- Correct!
Cash 800,000
b. Net income of Ship Corporation:
Case A-10%
Problem 12-07
McGraw-Hill/Irwin
Instructor
The equity method must be used by the company because it owns 40% (40,000 / 100,000) of the total
shares of the outstanding common stock of Cruise Corporation. The equity method must be used when
The market value method must be used by the company because it owns 10% (10,000 / 100,000) of the
DOCK COMPANY
General Journal
DOCK COMPANY
Case B-40%
Student Name:
Class:
Problem 12-07
McGraw-Hill/Irwin
Instructor
Requirement 3:
Schedule Case A Case B
Balance Sheet:
Long-term Investments:
Investment in SAS, at fair value 180,000 «- Correct!
Investment in affiliates 888,000 «- Correct!
4. Explanation
The amounts reported in Requirement (3) are different because of (1) the two different approaches
Cruise Corporation – outstanding shares 100,000
Purchased Ship Corporation stock:
Date of purchase January 10, 2011
Given Data P12-07:
DOCK COMPANY
Required:
1.
This workbook is organized as follows:
Sheet Name Contents
CP12-3 (this worksheet) CP12-3 Problem Requirements and Workbook Layout
Industry Ratio Report Industry Ratio Report
AEO Balance Sheets American Eagle Outfitters, Inc. Consolidated Balance Sheets
AEO Income Statements American Eagle Outfitters, Inc. Consolidated Statements of Operations
CP12-3 Comparing Companies within an Industry
Compute the profit margin, asset turnover, and return on assets ratios for both companies for the most recent reporting
year. Which company provided the higher return on its total assets during the current year?
Was the return on assets for American Eagle Outfitters and Urban Outfitters higher or lower than the industry average?