Problem: (Available-for-Sale Securities - Statement Presentation)
Alvarez Corp. invested its excess cash in available-for-sale securities during 2006. As of December 31, 2006, the portfolio of available-for-sale securities consisted of the following common stocks.
Security Quantity Cost Fair Value
Keesha Jones, Inc. 1,000 shares $ 15,000 $ 21,000
Eola Corp. 2,000 shares 50,000 42,000
Yevette Aircraft 2,000 shares 72,000 60,000
Totals $137,000 $123,000
Instructions:
(a) What should be reported on Alvarez's December 31, 2006, balance sheet relative to these securities? What should be reported on Alvarez's 2006 income statement?
On December 31, 2007, Alvarez's portfolio of available-for-sale securities consisted of the following common stocks.
Security Quantity Cost Fair Value
Keesha Jones, Inc. 1,000 shares $ 15,000 $20,000
Keesha Jones, Inc. 2,000 shares 38,000 40,000
King Company 1,000 shares 16,000 12,000
Yevette Aircraft 2,000 shares 72,000 22,000
Totals $141,000 $94,000
During the year 2007, Alvarez Corp. sold 2,000 shares of Eola Corp. for $38,200 and purchased 2,000 more shares of Keesha Jones, Inc. and 1,000 shares of King Company.
(b) What should be reported on Alvarez's December 31, 2007, balance sheet? What should be reported on Alvarez's 2007 income statement?
On December 31, 2008, Alvarez's portfolio of available-for-sale securities consisted of the following common stocks.
Security Quantity Cost Fair Value
Yevette Aircraft 2,000 shares $72,000 $82,000
King Company 500 shares 8,000 6,000
Totals $80,000 $88,000
During the year 2008, Alvarez Corp. sold 3,000 shares of Keesha Jones, Inc. for $39,900 and 500 shares of King Company at a loss of $2,700.
(c) What should be reported on the face of Alvarez's December 31, 2008, balance sheet? What should be reported on Alvarez's 2008 income statement?
(d) What would be reported in a statement of comprehensive income at (1) December 31, 2006, and (2) December 31, 2007?