Available-for-Sale Securities
Response to the following problem:
At the end of 2009, Terry Company prepared the following schedule of investments in available-for-sale securities (common stock):
|
Security
|
Cost
|
12/31/09 Fair Value
|
Cumulative Change in Fair Value
|
|
M
|
$37,000
|
$34,200
|
$(2,800)
|
|
N
|
42,000
|
43,100
|
1.100
|
|
Totals
|
$79,000
|
$77,300
|
$(1,700)
|
During 2010, the following transactions occurred:
June 8 Purchased O securities (common stock) for $50,000
Oct. 11 Sold all of the M securities for $35,400
Dec.31 Received dividends of $900 on the N and O securities, and the following year-end total market values were available:
N common stock, $43,900; O common stock, $49,600
Required
1. Prepare journal entries to record the preceding information.
2. Show how the preceding items are reported on the December 31, 2010 balance sheet of the Terry Company. Assume all investments are noncurrent.