Investments in Trading Securities}

Maxwell Company engaged in the following transactions involving short-term investments:

a. Purchased 200 shares of Bartco for \(\$ 12,800\).

b. Received a \(\$ 1.60\)-per-share dividend on the Bartco investment.

c. Sold 40 shares of Bartco for \(\$ 61\) per share.

d. Purchased 380 shares of Newton for \(\$ 20,900\).

e. Received a dividend of \(\$ 1.00\) per share on the Newton investment.

At December 31, the Bartco shares have a market value of \(\$ 60\) per share, and the Newton shares have a market value of \(\$ 59\) per share. .

\section*{Required:}

1. Prepare entries for Maxwell's journal to record these transactions assuming they are trading securities.

2. Calculate the market value of Maxwell's short-term investment portfolio at December 31 .

3. Prepare the necessary journal entry at December 31 .

4. CONCEPTUAL CONNECTION What is the statement of earnings effect of the adjusting entry?

5. How would these investments be reported on the December 31 statement of financial position?

\section*{Exercise