Problem 1 P & P owns the following securities. Informationrelating to the available-for-sale equity securities is presentedbelow. Security Cost Market Value Dec 31, 2014 A 10,000,000$40,000,000 B 20,000,000 $14,000,000 C 5,000,000 $15,000,000 D20,000,000 $12,000,000 Total 55,000,000 81,000,000 P & P isconcerned about meeting the annual earnings estimate. The CEO hasmade two proposals related to year-end investment activities: .Sell securities A and C. Assume that the company will sell thesecurities for the 12/31/2014 market value. ⨠. Tell the auditorsthat the company has decided to sell all of the securities in thenear term. This decision is the basis for a reclassification of thesecurities from available-for-sale to trading. ⨠Required:Determine the effect of each proposal on P & Pâs incomestatement. Ignore income tax considerations.
Problem 4 During 2014, P & P purchased 200,000 shares of C& C Inc. for $14 per share. C & C had 800,000, $10 parvalue common shares outstanding during the year. During 2014, C& C reported earnings per share of $2.00 and declared cashdividends of $1.50 per share. Required:â¨Prepare the necessaryentries for 2014 Problem
5 Assume the same facts as in Problem 4, except that P& Ponly purchased 100,000 shares of C&C Inc.âs common stock.Required: Prepare the necessary entries for 2014
Problem 1 P & P owns the following securities. Informationrelating to the available-for-sale equity securities is presentedbelow. Security Cost Market Value Dec 31, 2014 A 10,000,000$40,000,000 B 20,000,000 $14,000,000 C 5,000,000 $15,000,000 D20,000,000 $12,000,000 Total 55,000,000 81,000,000 P & P isconcerned about meeting the annual earnings estimate. The CEO hasmade two proposals related to year-end investment activities: .Sell securities A and C. Assume that the company will sell thesecurities for the 12/31/2014 market value. ⨠. Tell the auditorsthat the company has decided to sell all of the securities in thenear term. This decision is the basis for a reclassification of thesecurities from available-for-sale to trading. ⨠Required:Determine the effect of each proposal on P & Pâs incomestatement. Ignore income tax considerations.
Problem 4 During 2014, P & P purchased 200,000 shares of C& C Inc. for $14 per share. C & C had 800,000, $10 parvalue common shares outstanding during the year. During 2014, C& C reported earnings per share of $2.00 and declared cashdividends of $1.50 per share. Required:â¨Prepare the necessaryentries for 2014 Problem
5 Assume the same facts as in Problem 4, except that P& Ponly purchased 100,000 shares of C&C Inc.âs common stock.Required: Prepare the necessary entries for 2014
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