PR 15-4B Investment reporting
Guardian Devices, Inc., manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, 2013 and 2012 are provided below. Selected missing balances are shown by letters.
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Guardian Devices, Inc. |
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Balance Sheet |
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December 31, 2013 and 2012 |
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Dec. 31, 2013 |
Dec. 31, 2012 |
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Cash |
$104,000 |
$ 98,000 |
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Accounts receivable (net) |
71,000 |
67,500 |
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Available-for-sale investments (at cost)—Note 1 |
a. |
36,000 |
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Plus valuation allowance for available-for-sale investments |
b. |
6,000 |
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Available-for-sale investments (fair value) |
$ c. |
$ 42,000 |
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Interest receivable |
$ d. |
— |
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Investment in Omaha Co. stock—Note 2 |
e. |
$ 62,000 |
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Offi ce equipment (net) |
60,000 |
65,000 |
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Total assets |
$ f. |
$334,500 |
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Accounts payable |
$ 56,900 |
$ 45,100 |
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Common stock |
50,000 |
50,000 |
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Excess of issue price over par |
160,000 |
160,000 |
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Retained earnings |
g. |
73,400 |
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Plus unrealized gain (loss) on available-for-sale investments |
h. |
6,000 |
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Total liabilities and stockholders’ equity |
$ i. |
$334,500 |
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2012, are as follows:
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No. of Shares |
Cost per Share |
Total Cost |
Total Fair Value |
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Tyndale Inc. Stock |
600 |
$24 |
$14,400 |
$17,000 |
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UR-Smart Inc. Stock |
1,200 |
18 |
21,600 |
25,000 |
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$36,000 |
$42,000 |
Note 2. The Investment in Omaha Co. stock is an equity method investment representing 32% of the outstanding shares of Omaha Co.
The following selected investment transactions occurred during 2013:
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Apr. 21. |
Purchased 500 shares of Walton Winery, Inc., at $25 including brokerage commission. Walton Winery is classified as an available-for-sale security. |
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Sept. 9. |
Dividends of $7,500 are received on the Omaha Co. investment. |
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Oct. 1. |
Purchased $15,000 of Yokohama Co. 6%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. |
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Dec. 31. |
Omaha Co. reported a total net income of $50,000 for 2013. Guardian recorded equity earnings for its share of Omaha Co. net income. |
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Dec. 31. |
Accrued interest for three months on Yokohama bonds purchased on October 1. |
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31. |
Adjusted the available-for-sale investment portfolio to fair value using the following fair value per-share amounts: |
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Available-for-Sale |
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Investments |
Fair Value |
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Tyndale Inc. stock |
$26 per share |
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UR-Smart, Inc., stock |
$15 per share |
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Walton Winery, Inc., stock |
$30 per share |
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Yokohama Co. bonds |
101 per $100 of face value |
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31. |
Closed the Guardian Devices, Inc., net income of $28,925 for 2013. Guardian paid no dividends during 2013. |
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Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.