Chapter 15, Problem 3PSB

Requirement 1:

To determine

Journalize the transaction:

Any financial transactions entered into by an organization are first entered into the journals via dual entry system to account for a debit and credit transaction. Double bookkeeping system envisages that each transaction has dual effect on company accounts and every transaction is recorded to account for these effects.

To journalize the entries for recording the transaction of Troy Co.

Requirement 2:

To determine

The reporting on 31^st December Balance sheet consists of assets and liabilities that the firm owns on that particular date.

The amount to be reported to the 31^st December balance sheet for its long-term investments available for sale securities.

Requirement 3:

To determine

The reporting on 31^st December Income statement consists an account for all the expenses and gains that the company incurred during the entire fiscal year. All the gains from the sale of securities are reported as income in the income statement.

The amount to be reported to the 31^st December income statement pertaining to the gain or loss for its available for sale securities.