PLEASE HELP ASAP PLEASE HELP ASAP Glacier Products Inc. is a wholesaler of rock
ID: 2467097 • Letter: P
Question
PLEASE HELP ASAP
PLEASE HELP ASAP
Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, 2016. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31: Record these transactions on page 10:
2016 Jan. 18 Purchased 9,000 shares of Malmo Inc. as an available-for-sale investment at $40 per share, including the brokerage commission. July 22 A cash dividend of $3.00 per share was received on the Malmo stock. Oct. 5 Sold 500 shares of Malmo Inc. stock at $58.00 per share, less a brokerage commission of $100. Dec. 18 Received a regular cash dividend of $3.00 per share on Malmo Inc. stock. 31 Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $36.00 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
Record these transactions on page 11:
2017 Jan. 25 Purchased an influential interest in Helsi Co. for $800,000 by purchasing 75,000 shares directly from the estate of the founder of Helsi. There are 250,000 shares of Helsi Co. stock outstanding. July 16 Received a cash dividend of $3.00 per share on Malmo Inc. stock. Dec. 16 Received a cash dividend of $3.00 per share plus an extra dividend of $0.20 per share on Malmo Inc. stock. 31 Received $38,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $170,000 in 2017. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co. 31 Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $44 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $36 to $44 per share.
Required: A. Journalize the entries to record the preceding transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries. B. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, 2017, assuming the Retained Earnings balance on December 31, 2017, is $700,000. Refer to the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (On the balance sheet, there are only FOUR current assets, TWO Investments, and TWO Stockholders Equity entries) Please help ASAP! Thanks in advance!
Explanation / Answer
Answer A. Journal Entry Date Particulars Dr. Amt. Cr. Amt. Jan-18 AFS Investments - Malmo Dr. 360,000 2016 To Cash 360,000 (Record the Purchase of shares of Malmo Inc. 9000 Shares @ $40) Jul-22 Cash Dr. 27,000 2016 To Dividend Income - revenue 27,000 (Record dividend recd on Malmi Inc - 9000 Shares @ $3) Oct-05 Cash (500 Shares X $58 - $100) Dr. 28,900 2016 To AFS Investment - Malmo 20,000 To Profit on Sale of AFS Investment 8,900 (record the sale of Malmo Inc Shares and profit realized on sale of AFS Investment) Dec-18 Cash Dr. 25,500 2016 To Dividend Income - revenue 25,500 (Record dividend recd on Malmi Inc - 8500 Shares @ $3) Dec-31 Unrealized Loss on AFS Investment Dr. 34,000 2016 To Valuation Allowance for AFS Investment 34,000 (record the AFS investment at market value) Unrealized Loss on AFS Investment = 8500 Shares X ($40 - $36) = $34000 Jan-25 Invetments - Helsi Co Dr. 800,000 2017 To Cash 800,000 (Record the purchase of Shares of Helsi Co - 30% ownership - 75000 Shares) Jul-16 Cash Dr. 25,500 2017 To Dividend Income - revenue 25,500 (Record dividend recd on Malmi Inc - 8500 Shares @ $3) Dec-16 Cash Dr. 27,200 2017 To Dividend Income - revenue 27,200 (Record dividend recd on Malmi Inc - 8500 Shares @ $3.20) ` Dec-31 Cash Dr. 38,000 2017 To Investments - Helsi Ltd 38,000 (record the dividend recd from Helsi Co.) Dec-31 Investments Helsi-Ltd Dr. 51,000 2017 To unrealised Income from Helsi Ltd 51,000 (record the share of Glacier Product Inc. in Helsi Ltd, as per Equity Income) Dec-31 Valuation Allowance for AFS Investment Dr. 68,000 2017 To Unrealized Gain on AFS Investment 68,000 (record the AFS investment - Malmo Inc at market value) Unrealized Gain on AFS Investment = 8500 Shares X ($44 - $36) = $34000 Answer B. Glacier Corp Inc. Patial Balance Sheet as on Dec-31, 2017 Investments AFS Investment - Malmo Inc. 340,000 Add: Valuation allownace (68000-34000) 34,000 Net Balance 374,000 Investment - Helsi Ltd. (800000 +51000 - 38000) 813,000 Total Value of Investments 1,187,000 Stockholders' Equity Retained Earnings Opening balance 700,000 Add: Dividenfd recd from Malmo Inc 25,500 Add: Share of Profit of Helsi Ltd 51,000 Add: unrealised Gain on Malmo Inc.. Shares 68,000 Retained Earnings at the end 844,500
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