13. Pat Ernst is the controller of J-Products, Inc. At December 31, the end of its first year of operations, the company's investments in trading securities cost $74,000 and have a fair value of $70,000. Indicate how Pat would report these data in the financial statements prepared on December 31.
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- Lou Company has December 31, Year 1 balances of ÁOCI $27,000 (debit), APIC $77,000, and Retained Earnings $313,000. For Year 2, the company has net income of $17,000, an unrealized gain on available-for- sale securities of $18,000 , and the issuance of treasury stock costing $22,000 for $29,000. The ending Year 2 balances for AOCI, APIC, and Retained Earnings are, respectively $45,000, $84,000, and $330,000 $9,000, $70,000, and $330,000 $9,000, $84,000, and $330,000 $9,000, $84,000, and $296,000 а. b. С. d.Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of $50,000 cash on November 25. At December 31, these securities had a fair value of $47,000. This is the first and only time the company has purchased such securities. 1. Prepare the November 25 entry to record the purchase of debt securities. 2. Prepare the December 31 year-end adjusting entry for the securities’ portfolio. 3. Prepare the April 6 entry when Journ sells 10% of these securities ($5,000 cost) for $6,000 cash.During the month, Blue, Inc. purchased 1,050 shares for $7.00 per share and classified them as trading investments. At the end of the month, the price of the securities was $11.25 per share. What adjusting entry, if any, will Blue, Inc. record when it closes its books at the end of the month to reflect this change in value?ᐧ a Dr. Valuation Allowance for Trading Investments $11,812.50 Cr. Unrealized Gain on Trading Investments $11,812.50 b Dr. Unrealized Loss on Trading Investment $4,462.50 Cr. Valuation Allowance for Trading Investments $4,462.50 c Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Unrealized Gain on Trading Investments $4,462.50 Because the trading investments were not sold during the month, no adjusting entry is required. d Dr. Valuation Allowance for Trading Investments $4,462.50 Cr. Realized Gain on Trading Investments $4,462.50
- Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a fiscal year ending on December 31: Record these transactions on page 10: Year 1 Feb. 1. Purchased 7,500 shares of Caldwell Inc. as a trading security at $50 per share plus a brokerage commission of $75. May 1. Purchased 3,000 shares of Holland Inc. as a trading security at $42 plus a brokerage commission of $90. July 1. Sold 4,500 shares of Caldwell Inc. for $46 per share less a $110 brokerage commission. 31. Received an annual dividend of $0.50 per share on Caldwell Inc. stock. Dec. 31 The portfolio of trading securities was adjusted to fair values of $47 and $40 per share for Caldwell Inc. and Holland Inc., respectively. Record these transactions on page 11: Year 2 Apr. 1. Purchased 5,000 shares of Fuller Inc. as a trading security at $25…Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a fiscal year ending on December 31: Record these transactions on page 10: Year 1 Feb. 1. Purchased 4,900 shares of Caldwell Inc. as a trading security at $35 per share plus a brokerage commission of $490. May 1. Purchased 1,800 shares of Holland Inc. as a trading security at $47 plus a brokerage commission of $198. July 1. Sold 2,550 shares of Caldwell Inc. for $33 per share less a $95 brokerage commission. 31. Received an annual dividend of $0.30 per share on Caldwell Inc. stock. Dec. 31. The portfolio of trading securities was adjusted to fair values of $33 and $46 per share for Caldwell Inc. and Holland Inc., respectively. Record these transactions on page 11: Year 2 Apr. 1. Purchased 4,800 shares of Fuller Inc. as a trading security at $26…First National Bank buys and sells securities. The company's fiscal year ends on December 31. The following selected transactions relating to First National's trading account occurred during the year. December 20 Purchases 180,000 shares in Classic Computers common stock for $684,000 ($3.80 per share). December 28 Receives cash dividends of $4,800 from the Classic Computers shares. Required: How will each of these transactions affect the financial statements? bok nt Complete this question by entering your answers in the tabs below. December 20 December 28 Purchases 180,000 shares in Classic Computers common stock for $684,000 ($3.80 per share). How will this transaction affect the financial statements? Note: Amounts to be deducted should be indicated by a minus sign. Assets Balance Sheet Liabilities Stockholders' Equity Revenues & Common Stock Retained Earnings >
- On May 1, Republic Corporation purchased 400 shares of stock for P114 per share and held it as FVTPL financial assets. The price decreased to P106 per share on August 1 and then increased to P122 on December 31. During the year, the company received dividends of P3.50 per share. At what amount should the investment be valued in the December 31 balance sheet?Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a fiscal year ending on December 31:Year 1Feb. 1. Purchased 7,500 shares of Caldwell Inc. as a trading security at $50 per share plus a brokerage commission of $75.May 1. Purchased 3,000 shares of Holland Inc. as a trading security at $42 plus a brokerage commission of $90.July 1. Sold 4,500 shares of Caldwell Inc. for $46 per share less a $110 brokerage commission.31. Received an annual dividend of $0.50 per share on Caldwell Inc. stock.Dec. 31. The portfolio of trading securities was adjusted to fair values of $47 and $40per share for Caldwell Inc. and Holland Inc., respectively.Year 2Apr. 1. Purchased 5,000 shares of Fuller Inc. as a trading security at $25 per share plus a $100 brokerage commission.July 31. Received an annual dividend of $0.52 per share on Caldwell Inc. stock.Oct. 14. Sold…Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of $51,700 cash on November 25. At December 31, these securities had a fair value of $50,400. This is the first and only time the company has purchased such securities. 1. 2. & 3. Prepare the November 25 entry to record the purchase of debt securities, the December 31 year-end adjusting entry for the securities' portfolio, and the April 6 entry when Journ sells 11% of these securities ($5,687 cost) for $6,700 cash. Record purchase of available-for-sale securities. Date General Journal Debit Credit Nov. 25 Record the year-end adjustment to fair value, if any. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Record sale of 11% of available-for-sale securities. Note: Enter debits before…
- Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. a. On February 15, paid $160,000 cash to purchase GMI’s 90-day short-term notes at par, which are dated February 15 and pay 10% interest (classified as held-to-maturity). b. On March 22, bought 700 shares of Fran Inc. common stock at $51 cash per share. Cancun’s stock investment results in it having an insignificant influence over Fran. c. On May 15, received a check from GMI in payment of the principal and 90 days’ interest on the notes purchased in part a. d. On July 30, paid $100,000 cash to purchase MP Inc.’s 8%, six-month notes at par, dated July 30 (classified as trading securities). e. On September 1, received a $1 per share cash dividend on the Fran Inc. common stock purchased in part b. f. On October 8, sold 30 shares of Fran Inc. common stock for $54 cash per share. g. On October 30, received a…Satchel Corporation purchases equity securities costing $73,000. At December 31, the fair value of the portfolio is $65,000. Instructions Prepare the adjusting entry to report the securities properly, assuming that the investments purchased represent less than a 5% interest in the other companies. Indicate the statement presentation of the accounts in your entry.On January 1, Apple purchased $300,000 of AFS securities. The value of the securities decreased to $280,000 by Decem ber 31, and then permanently declined by $110,000 on March 15. Record the following journal entries: > January 1 December 31 March 15
