Assume that as of December 31, 2012, the Oceanna Company stock had a market valu
ID: 2491207 • Letter: A
Question
Assume that as of December 31, 2012, 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, 2012, Makala had a net income of $105,000. No dividends were paid.
Required:
1. Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012.
Makala Company
Balance Sheet (selected items)
December 31, 2012
Current assets:
$
$
2. Prepare the Stockholders' Equity section of the balance sheet as of December 31, 2012.
Makala Company
Balance Sheet (selected items)
December 31, 2012
Stockholders' Equity:
$
Total stockholders' equity
$
Hide1. Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012.
Makala Company
Balance Sheet (selected items)
December 31, 2012
Current assets:
$
$
Explanation / Answer
An available-for-sale security is a debt or equity security that is purchased with the intent of selling before it reaches maturity, or selling prior to a lengthy time period in the event the security does not have a maturity. Accounting standards necessitate that companies classify any investments in debt or equity securities when they are purchased. The investments can be classified as: held to maturity, held for trading or available for sale.
72300
MAKALA COMPANY BALANCE SHEET (SELECTED SECTION) 31-Dec-12 $ $ CURRENT ASSEST security oceanna company 700 * 49 34300 rockledge, inc 1900 * 20 3800072300