Student Name: Class: Problem 12-05 AMALGAMATED GENERAL CORPORATION General Journal ($ in millions) Account October 18 Investment in Millwork Ventures preferred shares Cash October 31 Cash Investment revenue November 1 Investment in Holistic Entertainment bonds Cash November 1 Cash Loss on sale of investments Investment in Kansas Abstractors bonds December 1 Investment in Household Plastics bonds Cash December 20 Investment in U.S. Treasury bonds Cash December 21 Investment in NXS common shares Cash December 23 Cash Investment in U.S. Treasury bonds Gain on sale of investments December 29 Cash Investment revenue Debit Credit
Student Name: Class: Problem 12-05 AMALGAMATED GENERAL CORPORATION General Journal ($ in millions) Account December 31 Accrued interest: Investment revenue receivable - Holistic Entertainment Investment revenue receivable - Household Plastics Investment revenue Revaluations: Unrealized holding loss on investments Investment in Millwork Ventures preferred shares Investment in NXS common shares Unrealized holding gain on investments Closing entry: Unrealized holding gain on investments (NXS) Investment revenue Gain on sale of investments (U.S. Treasury bonds) Loss on sale of investments (Kansas Abstractors) Income summary (to balance) 2007 January 7 Cash Loss on sale of investments (to balance) Investment in NXS common shares (after adjusting entry) Debit Credit
Given Data P12-05: AMALGAMATED GENERAL CORPORATION Securities (bonds) held 10/1 (Kansas Abstractors, Inc.) Interest rate on bonds (Kansas Abstractors, Inc.) Additional information: Number of preferred shares purchased (Millwork Ventures Company), 10/18/2006 Cost of preferred shares purchased (Millwork Ventures Company), 10/18/2006 Semi-annual interest received (Kansas Abstractors, Inc.), 10/31/2006 Bonds purchased (Holistic Entertainment Enterprises), 11/1/2006 Interest rate of bonds purchased (Holistic Entertainment Enterprises), 11/1/2006 Sold bonds (Kansas Abstractors, Inc.), 11/1/2006 Bonds purchased (Household Plastics Corporation), 12/1/2006 Interest rate of bonds purchased (Household Plastics Corporation), 12/1/2006 U.S. Treasury bonds purchased, 12/20/2006 Number of common shares purchased (NXS Corporation), 12/21/2006 Cost of common shares purchased (NXS Corporation), 12/21/2006 U. S. Treasury bonds sold, 12/23/2006 Dividend received from preferred shares (Millwork Ventures Company), 12/29/2006 Market price per share for preferred stock (Millwork Ventures Company), 12/31/2006 Market price per share (NXS Corporation), 12/31/2006 Fair value of bonds (Household Plastics Corporation), 12/31/2006 Fair value of bonds (Holistic Entertainment Enterprises), 12/31/2006 Sold common shares (NXS Corporation), 1/7/2007 2,000,000 $58,000,000 $1,500,000 $18,000,000 10% $28,000,000 $60,000,000 12% $5,600,000 4,000,000 $44,000,000 $5,700,000 $3,000,000 $27.50 $11.50 $58,700,000 $16,700,000 $43,000,000 $30,000,000 10%
Student Name: Class: Problem 12-07 RUNYAN BAKERY General Journal ($ in millions) Requirement 1: Account Purchase Investment in Lavery Labeling shares Cash Net income Investment in Lavery Labeling shares Investment revenue Dividends Cash Investment in Lavery Labeling shares Depreciation adjustment Investment revenue Investment in Labery Labeling shares Debit Credit
Requirement 2: Account Purchase Investment in Lavery Labeling shares Cash Dividends Cash Investment in Lavery Labeling shares Adjusting entry Net unrealized holding loss on investments Fair value adjustment Debit Credit
Given Data P12-07: RUNYAN BAKERY Percentage of outstanding common shares bought Purchase amount Number of shares purchased Dividend paid on 12/15/2006 Market value of common stock at 12/31/2006 Fair market book value of assets Assets - fair value over book value Useful life of plant facilities Net income, 2006 30% $324,000,000 10,000,000 $2 per share $31 per share $800,000,000 $80,000,000 6 years $160,000,000
Student Name: Class: Problem 12-08 NORTHWEST PAPERBOARD COMPANY General Journal ($ in millions) Requirement 1: Account Purchase Investment in Vancouver T&M shares Cash Net income Investment in Vancouver T&M shares Investment revenue Dividends Cash Investment in Vancouver T&M shares Inventory Investment revenue Investment in Vancouver T&M shares Depreciation Investment revenue Investment in Vancouver T&M shares Debit Credit
Requirement 2: Investment Revenue ($ in millions) Explanation Share of income Inventory Depreciation Requirement 3: Investment in Vancouver T&M shares ($ in millions) Explanation Cost Share of income Dividends Inventory Depreciation Requirement 4: Debit Credit Balance Debit Credit Balance
Given Data P12-08: NORTHWEST PAPERBOARD COMPANY Percentage of outstanding common shares bought Purchase amount Book value of net assets Inventory - fair value over book value Plant - fair value over book value Useful life of plant facilities Net income, 2006 Cash dividend paid 40% $400,000,000 $775,000,000 $5,000,000 $20,000,000 16 years $140,000,000 $30,000,000
Student Name: Class: Problem 12-11 ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Requirement 1: Land Loss on debt restructuring Note receivable Accrued interest receivable Requirement 2: ROTHSCHILD CHAIR COMPANY, INC. Debit Credit
Student Name: Class: Problem 12-11 Analysis Previous Value: Accrued interest Principal Carrying amount of the receivable New Value: Interest Principal Present value of the receivable Loss:
Amoritization Schedule Cash Interest (by agreement) Effective Interest 10% Increase in Balance (Discount Reduction)
Outstanding Balance
ROTHSCHILD CHAIR COMPANY, INC. General Journal Account January 1, 2006 Loss on troubled debt restructuring Accrued interest receivable Note receivable December 31, 2006 Cash Note receivable Interest revenue December 31, 2007 Cash Note receivable Interest revenue December 31, 2008 Cash Note receivable Interest revenue December 31, 2009 Cash Note receivable Interest revenue Cash Note receivable Requirement 3: ROTHSCHILD CHAIR COMPANY, INC. Debit Credit
Student Name: Class: Problem 12-11 Analysis Previous Value: Accrued interest Principal Carrying amount of the receivable New Value: Interest Loss:
Amoritization Schedule Cash Interest (by agreement) Effective Interest 10% Increase in Balance (Discount Reduction)
Outstanding Balance
ROTHSCHILD CHAIR COMPANY, INC. General Journal Account January 1, 2006 Loss on troubled debt restructuring Accrued interest receivable Note receivable December 31, 2006 Note receivable Interest revenue December 31, 2007 Note receivable Interest revenue December 31, 2008 Note receivable Interest revenue December 31, 2009 Note receivable Interest revenue Cash Note receivable Debit Credit
Given Data P12-11: ROTHSCHILD CHAIR COMPANY, INC. Bank note Bank note interest Fair market value of land Book value of land Remaining 4 interest payments Principal reduced to Settlement of debt at maturity date $20,000,000 10% $16,000,000 13,000,000 1,000,000 15,000,000 27,775,000