the 4 last tutors have been wrong 202 Rams Company purchased

the 4 last tutors have been wrong.

202 Rams Company purchased the following relatively long-e classiied as avarlable-for-sale securities Alternate Problems 1. Two thousand shares of Lacey Company capital stock at $439.20 plus brokers 2 One thousand shares of Membrow Company capital stock at $705.60 plus broker\'s Cash dividends of S18.00 per share on the Lacey capital stock and S14.40 per share on the Membrow capital stock were received on December 7 and December 10, respectively. On December 31,2012 per share market values are Lacey, $460.80; and Membrow, S655.20. Prepare journal entries to record these transactions. h. Prepare the necessary adjusting entry(ies) at December 31, 2012, to adjust the carrying values assuming that market price changes are believed to be temporary. Where would the accounts appear in the financial statements?

Solution

a) Journal Entries :

b) The Available for Sale securities accounts appear under the Current Assets in the Assets column.

The Cash and Unrealised Loss on revaluation would appear on Assets side.

Dividend income appear in the Income statement.

Date	Accounts Titles & description	Debit $	Credit $
Sep 1 12	Available for Sale - Lacey	878400
	Available for Sale - Membrow	705600
	Brokerage expenses	10800
	Cash		1594800
	(purchsed2000 lacey at $439.20 & 1000 membrow at $705.60)
Dec 7	Cash	36000
	Dividend income		36000
Dec 10	Cash	14400
	Dividend income		14400
Dec 31 12	Available for Sale - Lacey	43200
	Unrealised Loss on revaluation	7200
	Available for Sale - Membrow		50400
	(being revaluation of shares at year end Lacey at $460.80 & Membrow at $655.20)