General Corporation has the following investments in equity securities at December 31, 2002 (there are no existing balances in the market adjustment account):
|
Percentage of Shares |
Market Price |
||||
|
Company |
Classification |
Shares |
Owned |
Cost |
at 12/31/02 |
|
Clarke Corporation |
Trading |
1,000 |
2% |
$75 |
$78 |
|
Marlin Company |
Available for sale |
4,000 |
15 |
34 |
32 |
|
Air Products, Inc. |
Available for sale |
3,000 |
10 |
46 |
43 |
1. Prepare any adjusting entries required at December 31, 2002.
2. Illustrate how these investments would be presented on General Corporation’s balance sheet at December 31, 2002. The available for sale securities are expected to be held for two to five years.
3. Prepare the journal entry on April 10, 2003, when General Corporation sold the Clarke Corporation investment for $72 per share.
4. Assume that General Corporation still owns its investment in Marlin Company and Air Products at December 31, 2003; the market prices on that date are $37 for Marlin and $44 for Air Products. Prepare all adjusting journal entries needed at December 31, 2003.