GL1501 - Based on Problem 15-4A LO P4

Edmunds Corp. had no short-term investments prior to the year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.

Apr.		16		Purchased 6,000 shares of MYC Co. stock at $25 per share.
July		7		Purchased 4,500 shares of STO Co. stock at $50 per share.
		20		Purchased 2,000 shares of CMO Co. stock at $17 per share.
Aug.		15		Received a $1.40 per share cash dividend on the MYC Co. stock.
		28		Sold 3,600 shares of MYC Co. stock at $28 per share.
Oct.		1		Received a $3.00 per share cash dividend on the STO Co. shares.
Dec.		15		Received a $1.70 per share cash dividend on the remaining MYC Co. shares.
		31		Received a $2.40 per share cash dividend on the STO Co. shares.

The year-end fair values per share are: MYC Co., $26.00; STO Co., $48.50; and CMO Co., $14.00. Calculate the total cost and total fair value of the available-for-sale portfolio as of December 31, and calculate the amount of the required year-end adjusting entry, if any.

Cost of investments at December 31: # of Shares Cost MYC Company stock STO Co. stock CMO Co. Total cost Fair value of investments at December 31: # of Shares Fair value per share Fair Value MYC Company stock STO Co. stock CMO Co. Total fair value Total unrealized gain/loss as of December 31: Step 1: Determine what the unadjusted balance in the fair value adjustment equals: Step 2: Determine what the adjusted balance in the fair value adjustment account should equal: Step 3: Determine the amount of the adjustment to the fair value adjustment account required to get from Step 1 to Step 2:

For each transaction, indicate the change, if any, in total assets and total equity. If equity changes indicate whether the change was reflected as a component of net income, or directly within the stockholders' equity portion of the balance sheet. Remember that the change in total assets must agree with the change in total equity.

Change in Change in equity: Total assets As a component of net income As a direct component of stockholders' equity Total change in equity Apr. 16) Purchased 6,000 shares of MYC Co. stock at $25 per share. $0 $0 Jul. 7) Purchased 4,500 shares of STO Co. stock at $50 per share. 0 0 Jul. 20) Purchased 2,000 shares of CMO Co. stock at $17 per share. 0 0 Aug. 15) Received a $1.40 per share cash dividend on the MYC Co. stock. 0 Aug. 28) Sold 3,600 shares of MYC Co. stock at $28 per share. 0 Oct. 1) Received a $3.00 per share cash dividend on the STO Co. shares. 0 Dec. 15) Received a $1.70 per share cash dividend on the remaining MYC Co. shares. 0 Dec. 31) Received a $2.40 per share cash dividend on the STO Co. shares. 0 Dec. 31) Adjusted the securities to year-end fair value. 0 Totals $0 $0 $0 $0

Prove the accuracy of your responses on the Transaction Analysis tab by selecting the account titles reported on the income statement or as a component of stockholders' equity.

	On the transaction analysis tab, you indicated that total income changed by: $0 Select the income statement account balances that prove this amount: 0 0 0 Total net income On the transaction analysis tab, you indicated that total stockholders' equity changed by: $0 Select the stockholders' equity account balance that proves this amount: Change in Retained Earnings due to net income