During 2014, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $185,000.

During 2014, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $185,000. There were no purchases or sales of investments during the year. The market values at the beginning and end of the year were $225,000 and $160,000, respectively. The net income for 2014 was $180,000, and no dividends were paid during the year. The Stockholders’ Equity section of the balance sheet was as follows on December 31, 2013:


Copernicus Corporation
Stockholders’ Equity
December 31, 2013
Common stock $ 50,000
Paid-in capital in excess of par 250,000
Retained earnings 340,000
Unrealized gain (loss) on available-for-sale investments 40,000
Total $680,000




Prepare the Stockholders’ Equity section of the balance sheet for December 31, 2014.


Answer:

COPERNICUS CORPORATION
Balance Sheet (selected Stockholders’ Equity items)
December 31, 2014
Common stock $ 50,000
Paid-in capital in excess of par 250,000
Retained earnings* 520,000
Unrealized gain (loss) on available-for-sale investments** (25,000)
Total $795,000
* $340,000 + $180,000
** $40,000 + ($160,000 – $225,000), or $160,000 – $185,000