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Hockory Holdings, Inc. invests in various companies' stocks with the intent of receiving both income and growth in value of the companies over time. The company made the following investments during 20X6.

Jan. 5 Purchased 500 shares of Company A common stock for $15,500. The company expects to sell these shares within one year. Feb. 1 Purchased 700 shares of Company B common stock for $49,000. The company intends to hold these shares as a long term investment. June 1 Purchased 100, 8% bonds of Company C at a price to yield 10%. The bonds are due on June 1, 20Y1 and pay interest semiannually on June 1 and December 1 of each year. The face value of each bond is $1,000. The company intends to hold these bonds to maturity. The conpany use the effective in terest method for amortization purposes. July 31 Received a dividend on the company B stock in the amount of $1,000. Sept. 1 Company A announced and distributed a 2 for 1 stock split. Oct. 1 Sold 400 shares of Company A stock for $8,000. Nov. 1 Purchased 1,000 shares of Company D stock for $20 per share plus a $100 commission. The company intends to hold these shares as a long term investment. Dec. 1 Received the semiannual interest on the Company C bonds. Dec. 31 Prepared all adjusting entries required at year end. The quoted market prices for each investment on this date were as follows: Company A stock, $18; Company B stock, $83; Company C bonds, 101; and Company D stock, $17.50.

general entries:

Date	Particulars	Debit	Credit
5-Jan	Investment In trading securities	15500
	Cash		15500
1-Feb	Investment in long term equity securities	49000
	Cash		49000
1-Jun	Investment in held to maturity securities	100000
	Discount on bonds		20000
	Cash		80000
	Return on bonds is 8 % , i.e 8000 on face value
	we have purchased as return will be 10 %
	In order to have 10 % return we need to buy at 80000
31-Jul	Cash	1000
	Dividend Income		1000
1-Sep	No entry as there is no cost incurred
1-Oct	Cash	8000
	Gain on sale of securities		3667
	Investment in trading securities		4133
	Total No. of shares in A Company after split off
	= 500 + 1000 , =1500 ( 2 for every 1 held)
	now total cost will pertain to 1500 units
	proportionate cost of 400 shares = (15500 /1500) x 400
1-Nov	Investment in long term equity securities	20100
	Cash		20100
	Purchase cost will include 100 paid as commision
1-Dec	Cash	4000.00
	Discount on bonds
	Interest income
	Number of years to maturity are not provided
	Discount on bonds will be transferred to interest income each year as process of amortization
31-Dec	Investment In trading securities	8433
	Unrealised Gain on trading securities		8433
	Proportionate cost of 1100 shares in hand
	= (15500 /1500) x1100 , = 11367
	Market Value = 1100 x 18 , =19800
31-Dec	Investment in long term equity securities	9100
	Unrealised Gain on long term equity securities		9100
	Working for company b investment
	Cost of investment = 49000
	Market Value = 700 shares x 83, = 58100
31-Dec	Unrealised Loss on long term equity securities	2600
	Investment in long term equity securities		2600
	Working for company d investment
	cost of investment = 20100
	Market Value = 1000 shares x 17.50 , =17500

REQUIRED: (1)Prepare the sections of the banlance sheet, in proper form, to reflect the effect of the above information for the year ending December 31, 20X6. (2)Show the impact of the above information on the income statement for the year ending December 31, 20X6.

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