ar 2 ar. 14

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dec. 31
Year 2
Mar. 14
June 26
July 30
Dec. 31
2. Prepare the investment-related current asset balance sheet presentation for Zeus Investments Inc. on December 31, Year 2.
Transcribed Image Text:Dec. 31 Year 2 Mar. 14 June 26 July 30 Dec. 31 2. Prepare the investment-related current asset balance sheet presentation for Zeus Investments Inc. on December 31, Year 2.
Stock Investment Transactions, Trading Securities
Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by
Zeus Investments Inc., which has a fiscal year ending on December 31:
Year 1
Feb. 14.
Purchased 2,600 shares of Apollo Inc. as a trading security at $31 per share plus a brokerage commission of $520.
Apr. 1.
Purchased 1,200 shares of Ares Inc. as a trading security at $12 per share plus a brokerage commission of $240.
June 1.
Sold 600 shares of Apollo Inc. for $32 per share less an $80 brokerage commission.
June 27.
Received an annual dividend of $0.11 per share on Apollo Inc. stock.
Dec. 31.
The portfolio of trading securities was adjusted to fair values of $35 and $13 per share for Apollo Inc. and Ares Inc.,
respectively.
Year 2
Mar. 14.
Purchased 1,100 shares of Athena Inc. as a trading security at $36 per share plus a $165 brokerage commission.
June 26.
Received an annual dividend of $0.14 per share on Apollo Inc. stock.
July 30.
Sold 200 shares of Athena Inc. for $30 per share less a $60 brokerage commission.
Dec. 31.
The portfolio of trading securities had a cost of $109,575 and a fair value of $106,200, requiring a credit balance in
Valuation Allowance for Trading Investments of $3,375 ($109,575 - $106,200). Thus, the debit balance from
December 31, Year 1 is to be adjusted to the new balance.
Required:
1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations,
round per share amounts to two decimal places. When required, round final answers to the nearest dollar.
Transcribed Image Text:Stock Investment Transactions, Trading Securities Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31: Year 1 Feb. 14. Purchased 2,600 shares of Apollo Inc. as a trading security at $31 per share plus a brokerage commission of $520. Apr. 1. Purchased 1,200 shares of Ares Inc. as a trading security at $12 per share plus a brokerage commission of $240. June 1. Sold 600 shares of Apollo Inc. for $32 per share less an $80 brokerage commission. June 27. Received an annual dividend of $0.11 per share on Apollo Inc. stock. Dec. 31. The portfolio of trading securities was adjusted to fair values of $35 and $13 per share for Apollo Inc. and Ares Inc., respectively. Year 2 Mar. 14. Purchased 1,100 shares of Athena Inc. as a trading security at $36 per share plus a $165 brokerage commission. June 26. Received an annual dividend of $0.14 per share on Apollo Inc. stock. July 30. Sold 200 shares of Athena Inc. for $30 per share less a $60 brokerage commission. Dec. 31. The portfolio of trading securities had a cost of $109,575 and a fair value of $106,200, requiring a credit balance in Valuation Allowance for Trading Investments of $3,375 ($109,575 - $106,200). Thus, the debit balance from December 31, Year 1 is to be adjusted to the new balance. Required: 1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.
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