CHART OF ACCOUNTS

Scofield Financial Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
121	Allowance for Doubtful Accounts
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
161	Investments-Wilkomm Inc.
162	Investments-McMarsh Inc.
163	Investments-Daley Inc.
165	Valuation Allowance for Trading Investments
166	Valuation Allowance for Available-for-Sale Investments
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
231	Interest Payable
241	Salaries Payable
251	Sales Tax Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Treasury Stock
332	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
350	Unrealized Gain (Loss) on Available-for-Sale Investments
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
611	Interest Revenue
612	Dividend Revenue
631	Gain on Sale of Investments
641	Unrealized Gain on Trading Investments

	EXPENSES
511	Cost of Merchandise Sold
512	Bad Debt Expense
515	Credit Card Expense
516	Cash Short and Over
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Repairs Expense
534	Selling Expenses
535	Rent Expense
536	Insurance Expense
537	Office Supplies Expense
538	Store Supplies Expense
561	Depreciation Expense-Store Equipment
562	Depreciation Expense-Office Equipment
590	Miscellaneous Expense
710	Interest Expense
731	Loss on Sale of Investments
741	Unrealized Loss on Trading Investments

Scofield Financial Co. is a regional insurance company that began operations on January 1, 2016. The following transactions relate to trading securities acquired by Scofield Financial Co., which has a fiscal year ending on December 31:

Record these transactions on page 10:

2016
Mar.	14	Purchased 7,300 shares of Wilkomm Inc. as a trading security at $37 per share plus a brokerage commission of $730.
Apr.	24	Purchased 1,800 shares of McMarsh Inc. as a trading security at $47 plus a brokerage commission of $198.
Jun.	1	Sold 3,800 shares of Wilkomm Inc. for $35 per share less a $105 brokerage commission.
	30	Received an annual dividend of $0.30 per share on Wilkomm Inc. stock.
Dec.	31	The portfolio of trading securities was adjusted to fair values of $35 and $46 per share for Wilkomm Inc. and McMarsh Inc., respectively.

Record these transactions on page 11:

2017
Apr.	4	Purchased 4,800 shares of Daley Inc. as a trading security at $29 per share plus a $240 brokerage commission.
Jun.	28	Received an annual dividend of $0.45 per share on Wilkomm Inc. stock.
Sep.	9	Sold 960 shares of Daley Inc. for $31 per share less a $50 brokerage commission.
Dec.	31	The portfolio of trading securities had a cost of $326,200 and a fair value of $404,846, requiring a debit balance in Valuation Allowance for Trading Investments of $78,646 ($404,846 -$326,200). Thus, the credit balance from December 31, 2016, is to be adjusted to the new balance.

Required:

A.

Journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page.

B.

Prepare the investment-related current asset balance sheet presentation for Scofield Financial Co. on December 31, 2017.

C.

How are unrealized gains and losses on trading investments presented in the financial statements?

*

Refer to the information given and the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. Less or Plus will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Amount Descriptions
Increase in retained earnings
Net income
Net loss
Other comprehensive income (loss)
Other income (loss)
Retained earnings, December 31, 2017
Retained earnings, January 1, 2017
Trading investments (at cost)
Trading investments (at fair value) journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries. In your computations, round per share amounts to two decimal places. How are unrealized gains and losses on trading investments presented in the financial statements? Unrealized gains and losses on trading investments are reported on the Stockholders Equity section of the balance sheet or income statement, often as Other Income (Losses) . For 2016, Scofield Financial Co. would have reported an unrealized loss of $9,348 as Other Comprehensive Income (Loss) or unrealized loss of $9,348 as Other Losses . For 2017, Scofield Financial Co. would have reported an unrealized gain of $78,646 as Other Comprehensive Income (Loss) or unrealized gain of $87,994 as Other Income . If unrealized gains and losses were significant for Scofield Financial, then they would be separately disclosed on the income statement or separately disclosed on the balance sheet .

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