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Balance Sheet Presentation of Available-for-Sale Investments

During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows:

Security Shares Purchased Cost
Hawking Inc. 950 $53,580
Pavlov Co. 2,570 75,558

Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $67 per share and the Pavlov Co. stock had a market value of $53 per share. Galileo Company had net income of $414,500 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets.

a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments.

Galileo Company
Balance Sheet (selected items)
December 31, Year 1
Assets
Current Assets:
$
$

b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.

Galileo Company
Balance Sheet (selected Stockholders' Equity items)
December 31, Year 1
Stockholders' Equity
$
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