luminous publishing inc is a book publisher the comparative unclassified balance she 554506
PR 15-4A Investment reporting
Luminous Publishing, Inc., is a book publisher. The comparative unclassified balance sheets for December 31, 2013 and 2012 are provided below. Selected missing balances are shown by letters.
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Luminous Publishing, Inc. |
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Balance Sheet |
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December 31, 2013 and 2012 |
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Dec. 31, 2013 |
Dec. 31, 2012 |
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Cash |
$178,000 |
$157,000 |
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Accounts receivable (net) |
106,000 |
98,000 |
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Available-for-sale investments (at cost)—Note 1 |
a. |
53,400 |
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Less valuation allowance for available-for-sale investments |
b. |
3,900 |
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Available-for-sale investments (fair value) |
$ c. |
$49,500 |
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Interest receivable |
$ d. |
— |
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Investment in Quest Co. stock—Note 2 |
e. |
$55,000 |
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Offi ce equipment (net) |
90,000 |
95,000 |
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Total assets |
$ f. |
$454,500 |
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Accounts payable |
$56,900 |
$51,400 |
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Common stock |
50,000 |
50,000 |
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Excess of issue price over par |
160,000 |
160,000 |
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Retained earnings |
g. |
197,000 |
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Less unrealized gain (loss) on available-for-sale investments |
h. |
3,900 |
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Total liabilities and stockholders’ equity |
$ i. |
$454,500 |
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2012, are as follows:
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No. of Shares |
Cost per Share |
Total Cost |
Total Fair Value |
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Barns Co. Stock |
1,600 |
$12 |
$19,200 |
$17,500 |
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Dynasty Co. Stock |
900 |
38 |
34,200 |
32,000 |
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$53,400 |
$49,500 |
Note 2. The investment in Quest Co. stock is an equity method investment representing 32% of the outstanding shares of Quest Co.
The following selected investment transactions occurred during 2013:
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May 5. |
Purchased 2,200 shares of Gypsy, Inc., at $22 per share including brokerage commission. Gypsy, Inc., is classified as an available-for-sale security. |
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Sept. 1. |
Purchased $30,000 of Norton Co. 5%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on September 1 and March 1. |
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9. |
Dividends of $9,000 are received on the Quest Co. investment. |
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Dec. 31. |
Quest Co. reported a total net income of $80,000 for 2013. Luminous recorded equity earnings for its share of Quest Co. net income. |
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31. |
Accrued four months of interest on the Norton bonds. |
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31. |
Adjusted the available-for-sale investment portfolio to fair value using the following fair value per-share amounts: |
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Available-for-Sale |
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Investments |
Fair Value |
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Barns Co. stock |
$11 per share |
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Dynasty Co. stock |
$33 per share |
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Gypsy Inc. stock |
$23 per share |
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Norton Co. bonds |
98 per $100 of face value |
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Dec. 31. |
Closed the Luminous Publishing Inc. net income of $114,000 for 2013. Luminous paid no dividends during 2013. |
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Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
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