question archive During 2012, Norcross Corporation held a portfolio of available-for-sale securities having a cost of $175,000
During 2012, Norcross Corporation held a portfolio of available-for-sale securities having a cost of $175,000
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During 2012, Norcross Corporation held a portfolio of available-for-sale securities having a cost of $175,000. There were no purchases or sales of investments during the year. The market values at the beginning and end of the year were $215,000 and $150,000, respectively. The net income for 2012 was $110,000, and no dividends were paid during the year. The Stockholders’ Equity section of the balance sheet
was as follows on December 31, 2011:
Norcross Corporation
Stockholders’ Equity
December 31, 2011
Common Stock....................$ 50,000
Paid-in Capital in excess of par value ........... 350,000
Retained earnings................... 265,000
Unrealized gain (loss) on available-for-sale investments... 40,000
Total ...................... $705,000
Prepare the Stockholders’ Equity section of the balance sheet for December 31, 2012.
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NORCROSS CORPORATION
Stockholders’ Equity
December 31, 2012
Common stock ……………………………………………………………...........................$ 50,000
Paid-in capital in excess of par value........................................................... 350,000
Retained earnings......................................................................................... 375,000*
Unrealized gain (loss) on available-for-sale investments.......................... (25,000)**
Total........................................................................................................... $750,000
*$265,000 + $110,000
**$40,000 + ($150,000 – $215,000), or $150,000 – $175,000
