Problem NO: 11

Castleman Holdings, Inc. had the following availablefor- sale investment portfolio at January 1, 2014.\nEvers Company 1,000 shares @ $15 each $15,000\nR

Castleman Holdings, Inc. had the following availablefor- sale investment portfolio at January 1, 2014.

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

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Rogers Company 900 shares @ $20 each 18,000

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Chance Company 500 shares @ $9 each 4,500

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Equity investments (available-for-sale) @ cost 37,500

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Fair value adjustment (available-for-sale) (7,500)

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Equity investments (available-for-sale) @ fair value $30,000

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During 2014, the following transactions took place.

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

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

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

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4. At December 31, 2014, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8.

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During 2015, the following transactions took place.

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

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

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

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8. At December 31, 2015, the stocks had the following price per share values: Evers $19 and Rogers $21.

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Instructions

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

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(b) Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2014 and 2015.

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