The following transactions and information pertain to Brown Co long term investments during 2015 and 2016 . Brown did not own any long term investments prior to 2015

The following transactions and information pertain to Brown Co long term investments during
2015 and 2016 . Brown did not own any long term investments prior to 2015.


Show the appropriate journal entries for each transactions in good form (show your
computations if you need to calculate a number for the journal entry)



Show the relevant portions of each year’s balance sheet and income statement that
reflects these transactions for both 2015 and 2016

2015
Sept 9 Purchased 1,000 shares of Packard, Inc. common stock for $80,000 cash.. These
shares represent 30% of Packard’s outstanding share.
Oct 2 Purchased 2,000 shares of AT&T common stock for $60,000 cash. These shares
represent less than 1% ownership in AT&T.
Oct 17 Purchased as a long term investment 1,000 shares of Apple Computer common stock
for $40,000 cash. These shares are less than 1% of Apple’s outstanding shares.
Nov 1 Received $5,000 cash dividend from Packard.
Nov 30 Received $3,000 cash dividend from AT&T.
Dec 15 Received $1,400 cash dividend from Apple.
Dec 31Packard’s 2015 net income is $70,000.
Dec 31

Market values for the investments in equity securities are Packard $84,000;
AT&T $48,000; and Apple Computer $45,000.

Dec 31For preparing financial statements, note the following post-closing account balances:
Common Stock, $500,000 and Retained Earnings $350,000.

2016
Jan 1 Sold Packard, Inc. shares for $108,000 cash.
May 30

Received $3,100 cash dividend from AT&T.

June 15

Received $1,600 cash dividend from Apple.

Aug 17 Sold the AT&T stock for $52,000 cash.
Aug 19 Purchased 2,000 shares of Coca Cola common stock for $50,000 cash as a long term
investment. The stock represents less than a 5% ownership in Coca Cola.
Dec 15 Received $1,800 cash dividend from Apple.

Dec 31

Market values for the investments in equity securities are Apple Computer
$39,000 and Coca Cola $48,000.

Dec 31For preparing financial statements, note the following post-closing account balances:
Common Stock, $500,000 and Retained Earnings $410,000.

Tips:


Account for the investment in Packard under the equity method.



Account for the investments in AT&T, Apple and Coca Cola as long term investments in
available for sale.



Prepare the information for the two years balance sheets by including the appropriate
asset and equity accounts.



List the relevant income statement items with account name and balance for each year.