Question - During 2012, its first year of operations, Makala Company purchased two available-for-sale investments as follows:
Assume that as of December 31, 2012, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share.
Makala had 10,000 shares of no par stock outstanding that was issued for $150,000. For the year ending December 31, 2012, Makala had a net income of $105,000. No dividends were paid.
Required:
1. Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012.
2. Prepare the Stockholders' Equity section of the balance sheet as of December 31, 2012.