During the First Year of Operations, Makala Company Purchased Two

question 167

Essay

During the first year of operations, Makala Company purchased two available-for-sale investments as follows: $$\begin{array} { | l | l | l | } \hline \text { Security } & \text { Shares Purchased } & \text { Cost } \\\hline \text { Oceanna Company } & 700 & \$ 29,000 \\\hline \text { Rockledge, Inc. } & 1,900 & 41,000 \\\hline\end{array}$$ Assume that as of December 31, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share. Makala had 10,000 shares of no par stock outstanding that was issued for $150,000. For the year ending December 31, Makala had a net income of $105,000. No dividends were paid.
a) Prepare the current assets section of the balance sheet presentation for the available-for sale securities as of December 31.
b) Prepare the stockholders' equity section of the balance sheet as of December 31.

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Definitions:

Fear

A disagreeable feeling resulting from the conviction that a person or entity poses a risk, may inflict harm, or constitutes a menace.

Emotional Expression

The way in which a person outwardly shows or communicates their emotions, through facial expressions, body language, or verbal communication.

Decision Making

The method of selection that involves pinpointing what decision needs to be made, collecting relevant information, and evaluating different potential solutions.

Emotional Reactions

The automatic, often unconscious, psychological responses elicited by various stimuli or situations, which can vary widely across different individuals.