Problem - Equity Investments-Available-for-Sale

Castleman Holdings, Inc. had the following available-for-sale investment portfolio at January 1, 2010.

Evers Company 1,000 shares @ $15 each $15,000

Rogers Company 900 shares @ $20 each 18,000

Chance Company 500 shares @ $9 each 4,500

Available-for-sale securities @ cost 37,500

Securities fair value adjustment-Available-for-sale (7,500)

Available-for-sale securities @ fair value $30,000

During 2010, the following transactions took place.

1. On March 1, Rogers Company paid a $2 per share dividend.

2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for $11 per share.

3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Co. stock at $16 per share.

4. At December 31, 2010, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8. During 2011, the following transactions took place.

5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for $8 per share.

6. On March 1, Rogers Company paid a $2 per share dividend.

7. On December 21, Evers Company declared a cash dividend of $3 per share to be paid in the next month.

8. At December 31, 2011, the stocks had the following price per shares values: Evers $19 and Rogers $21.

Instructions -

(a) Prepare journal entries for each of the above transactions.

(b) Prepare a partial balance sheet showing the Investments account at December 31, 2010 and 2011.