Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The following transactions relate to trading securities acquired by Zeus Inc., which has a fiscal year ending on December 31: 20Y8 Feb. 14. Purchased 4,800 shares of Apollo Inc. common stock at $26 per share plus a brokerage commission of $192. Apollo Inc. has 150,000 shares of common stock outstanding. Apr. 1. Purchased securities of Ares Inc. as a trading investment for $45,000. June 1. Sold 600 shares of Apollo Inc. for $32 per share less a $100 brokerage commission. June 27. Received an annual dividend of $0.20 per share on 4,200 shares of Apollo Inc. stock. Oct. 15. Sold the remaining shares of Apollo Inc. for $25.50 per share less a $300 brokerage commission. Dec. 31. The trading securities of Ares Inc. have a fair value on December 31 of $51,300. 20Y9 Mar. 14. Purchased securities of Athena Inc. as a trading investment for $78,000. July 30. Sold securities of Athena Inc. that cost $28,000 for $25,000. Dec. 31. The fair values of the Ares Inc. and Athena Inc. securities are as follows: Issuing Company Cost Fair Value Ares Inc. $45,000 $54,500 Athena Inc. 50,000 60,000 Required: 1. Journalize the entries to record the preceding transactions, including any December 31 adjusting entries. If an amount box does not require an entry, leave it blank. 2. Prepare the Trading Investments section of the December 31, 20Y9, balance sheet for Zeus Inc. Zeus Investments Inc. Balance Sheet (selected items) December 31, 20Y9 Current Assets: $fill in the blank 65 fill in the blank 67 $fill in the blank 69 3. How are unrealized gains or losses on trading investments presented in the financial statements of Zeus Investments Inc.? Unrealized gains or losses are reported in the , often as

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The following transactions relate to trading securities acquired by Zeus Inc., which has a fiscal year ending on December 31:

20Y8
Feb.	14.	Purchased 4,800 shares of Apollo Inc. common stock at $26 per share plus a brokerage commission of $192. Apollo Inc. has 150,000 shares of common stock outstanding.
Apr.	1.	Purchased securities of Ares Inc. as a trading investment for $45,000.
June	1.	Sold 600 shares of Apollo Inc. for $32 per share less a $100 brokerage commission.
June	27.	Received an annual dividend of $0.20 per share on 4,200 shares of Apollo Inc. stock.
Oct.	15.	Sold the remaining shares of Apollo Inc. for $25.50 per share less a $300 brokerage commission.
Dec.	31.	The trading securities of Ares Inc. have a fair value on December 31 of $51,300.
20Y9
Mar.	14.	Purchased securities of Athena Inc. as a trading investment for $78,000.
July	30.	Sold securities of Athena Inc. that cost $28,000 for $25,000.
Dec.	31.	The fair values of the Ares Inc. and Athena Inc. securities are as follows:

Issuing Company	Cost	Fair Value
Ares Inc.	$45,000	$54,500
Athena Inc.	50,000	60,000

Required: 1. Journalize the entries to record the preceding transactions, including any December 31 adjusting entries. If an amount box does not require an entry, leave it blank.

2. Prepare the Trading Investments section of the December 31, 20Y9, balance sheet for Zeus Inc.