4450
43
9450
24
5000
96
7400
70
25000
23.5
51300
1
2
3
26
12/31/2012
88000
185000
-6000
66000
3967
17000
150000
110000
-20000
-73000
51300
-20000
-500000
18900
-1000
-45000
-300000
-5000
90000
5000
178800
6000
0
Attached is the trial balance of James Appliance Company, for the year ended December 31, 2012. It isn’t the final trial balance, but it does contain all the adjustments
except those relevant to the investments held by the company. JAMES’ POLICY IS TO ACCRUE INCOME GENERATED FROM CASH DIVIDENDS ON THE DECLARATION
DATE.
A.
No entries had been made to the Investment account during 2012. The detail to support the balance on your trial balance follows:
100 shares of $4 ABD Corp. Preferred Stock
300 shares of Banana Tabulators, Inc. Common
Five $1000 bonds of HAL Corporation (8% coupon rate, interest
payable 6/1 and 12/1, maturity 12/1/2020)
100 shares Consolidated Bell Common
1,000 shares of Red & Black Transportation Corp. Common Stock
Total
Cost
FV (per share) as of 12/31/2012
The ABD preferred stock was purchased for cash income. This stock is readily marketable, but there is no intention of selling this stock any time in the near future.
ABD declared the full stated dividend on December 15, 2012 and it is due to be paid January 16, 2013. James Corp. owns 40% of ABD’s preferred stock, and ABD’s
net income for the year was $24,000
The Banana Tabulator stock was originally purchased 3 years ago with the expectation that it would grow sharply in value; the recent fall in the fair value of the stock is
due, according to James’ stock advisor, on a temporary depression in the tabulator market so its value is expected to eventually recover. It is now the intention of the
owner to hold on to this security for probably two or three more years. No cash dividends were declared or paid this year by Banana Tabulator.
The HAL bonds and the Consolidated Bell common stock were both purchased in 2010 with…