During the first year of operations, Makala Company purchased two available-for-sale investments as follows: $$\begin{array} { | l | l | l | }
\hline \text { Security } & \text { Shares Purchased } & \text { Cost } \
\hline \text { Oceanna Company } & 700 & \$ 29,000 \
\hline \text { Rockledge, Inc. } & 1,900 & 41,000 \
\hline
\end{array}$$ Assume that as of December 31, 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, Makala had a net income of $105,000. No dividends were paid.
a) Prepare the current assets section of the balance sheet presentation for the available-for sale securities as of December 31.
b) Prepare the stockholders' equity section of the balance sheet as of December 31.

Question

During the first year of operations, Makala Company purchased two available-for-sale investments as follows: $$\begin{array} { | l | l | l | } 
\hline \text { Security } & \text { Shares Purchased } & \text { Cost } \
\hline \text { Oceanna Company } & 700 & \$ 29,000 \
\hline \text { Rockledge, Inc. } & 1,900 & 41,000 \
\hline
\end{array}$$ Assume that as of December 31, 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, Makala had a net income of $105,000. No dividends were paid.
a) Prepare the current assets section of the balance sheet presentation for the available-for sale securities as of December 31.
b) Prepare the stockholders' equity section of the balance sheet as of December 31.

Quizplus · Accepted Answer

The Answer of During the first year of operations, Makala Company purchased two available-for-sale investments as follows: $$\begin{array} { | l | l | l | } 
\hline \text { Security } & \text { Shares Purchased } & \text { Cost } \
\hline \text { Oceanna Company } & 700 & \$ 29,000 \
\hline \text { Rockledge, Inc. } & 1,900 & 41,000 \
\hline
\end{array}$$ Assume that as of December 31, 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, Makala had a net income of $105,000. No dividends were paid.
a) Prepare the current assets section of the balance sheet presentation for the available-for sale securities as of December 31.
b) Prepare the stockholders' equity section of the balance sheet as of December 31.

During the First Year of Operations, Makala Company Purchased Two