Page 580 - Accounting Principles (A Business Perspective)

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$114.38
30 Cash (+A) 11,640
Trading securities (-A) 11,438
Gain on sale of trading securities (+SE) 202
To record the sale of trading securities:
Proceeds = $12,000 -$360; cost = $114.38 x 100 shares.
Sept. 15 Received 60 shares of Sly common stock as a 10% stock
dividend. New cost per share is $29,700/660 shares = $45.
Dec. 31 Unrealized loss on trading securities (-SE) 293
Trading securities (-A) 293
To write trading securities down to market value.
Cost Market Inc. (Dec.) in
marketable
value
Sly common stock $29,700 $30,195* $495
Rob common stock 11,438 10,650† (788)
Total $41,138 $40,845 $(293)
* $45.75 x 660 shares = $30,195.
† $106.50 x 100 shares = $10,650.
Solution to demonstration problem B
Landford Company and Subsidiary Casey Company
Work Sheet for Consolidation Balance Sheet
2010 January 2 (date of acquisition)
P S Eliminations Consolidate
d
Assets Company Company Debit Credit Amounts
Cash 75,000 30,000 105,000
Accounts receivable, 90,000 37,500 127,500
net
Notes receivable 15,000 7,500 (2) 15,000 7,500
Merchandise 112,500 45,000 157,500
inventory
Investment in Casey 300,000 (1) 300,000 -0-
Company
Investment in bonds 30,000 (3) 30,000 -0-
Plant and equipment, 303,000 195,000 498,000
net
Goodwill (1) 15,000 15,000
895,500 345,000 910,500
Liabilities and
stockholders' equity
Accounts payable 75,000 45,000 120,000
Notes payable 22,500 15,000 (2) 15,000 22,500
Bonds payable 225,000 (3) 30,000 195,000
Common stock 300,000 150,000 (1) 150,000 300,000
Paid-in capital excess 60,000 (1) 60,000 -0-
of par value –
Common
Retained earnings 273,000 75,000 (1) 75,000 273,000
895,500 345,000 345,000 345,000 910,500
Key terms
Available-for-sale securities Securities purchased that will be held for longer than the near term.
Consolidated statements The financial statements that result from consolidating the parent's financial
statement amounts with those of its subsidiaries (after certain eliminations have been made). The

Accounting Principles: A Business Perspective 581 A Global Text