E 17-1, E17-2, E17-9, E17-12, E17-16

E17-1 a) 1 b) 2 c) 1 d) 2 e) 3 f) 2

E17-2

a) January 1, 2012 Debt Investments (Held-to-Maturity) 300,000 Cash 300,000 b) December 31, 2012 Cash 30,000 Interest Revenue 30,000 c) December 31, 2013 Cash 30,000 Interest Revenue 30,000 E17-9

A) The portfolio is to be reported at fair value of 54,500. The entry being unrealized holding 1500 of which 200 is recognized.

Fair Value Adjustment (Available-for-Sale) 1,300 Unrealized Holding Gain or Loss—Equity 1,300 B) Unrealized holding of 1500 is to be reported as an addition to stock holders equity. WENGER, INC. Balance Sheet As of December 31, 2012 Current assets: Equity investments $54,500 Stockholders’ equity: Common stock xxx,xxx Paid-in capital in excess of par— Common stock xxx,xxx Retained earnings xxx,xxx Accumulated other comprehensive income 1,500 Total stockholders’ equity $xxx,xxx

(c) Computation of realized gain or loss on sale of stock: Net proceeds from sale of security A $15,300 Cost of security A 17,500 Loss on investments ($ 2,200)

January 20, 2013 Cash 15,300 Loss on Sale of Investments 2,200 Equity Investments (Available-for-Sale) 17,500

E17-12

Journal entries by Hatcher Cosmetics:

Record purchase of 20,000 shares of Ramirez Fashion at a cost of $14 per share: March 18, 2012 Equity Investments (Available-for-Sale) 280,000 Cash 280,000

To record the dividend revenue from Ramirez Fashion:

June 30, 2012

Cash 7,500 Dividend Revenue ($75,000 X 10%) 7,500