Instructions Rios Co. is a regional insurance company that began operations on January 1, 20Y2. The following selected transactions relate to investments acquired by Rios Co., which has a fiscal year ending on December 31: Record these transactions on page 10 20Y2 Feb 1 May 1 July Purchased 7,400 shares of Caldwell Inc. common stock at $38 per share plus a brokerage commission of $740. Caldwell has 100,000 shares of common stock outstanding. Purchased securities of Holland Inc. as a trading investment for $93,687 Sold 3,850 shares of Caldwell Inc. for $36 per share less a $105 brokerage commission. 31 Received an annual dividend of $0.25 per share on 3,550 shares of Caldwell Inc. stock. 15 Sold the remaining shares of Caldwell Inc. for $39 per share less a $85 brokerage commission 31 The trading securities of Holland Inc. have a fair value on December 31 of $84,345. 1 Nov. Dec. Record these transactions on page 11 20Y3 Apr. 1 Oct 14 Purchased securities of Fuller Inc. as a trading investment for $75,150. Sold securities of Fuller Inc. that cost $15,030 for $16,140. The fair values of the Holland Inc. and Fuller Inc. securities are as follows: Dec. 31 Issuing Company Cost Fair Value Holland Inc. $93,687 $153,807 Fuller Inc 60, 120 77,601 Required: 1. Journalize the entries to record the preceding transactions, including any December 31 adjusting entries. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your intermediate calculations to two decimal places and round your final answers to the nearest dollar. 2. Prepare the Trading Investments section of the December 31, 2043, balance sheet for Rios Co. Be sure to complete the statement heading Refer to the Chart of Accounts and the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Colons () will fill in where needed. 3. How are unrealized gains or losses on trading investments presented on the financial statements of Rios Co.? Chart of Accounts CHART OF ACCOUNTS Rios Co. General Ledger ASSETS REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 631 Gain on Sale of Investments 641 Unrealized Gain on Trading Investments 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-Caldwell Inc. Stock 162 Trading Investments-Holland Inc. 163 Trading Investments-Fuller Inc. 165 Valuation Allowance for Trading Investments 168 Valuation Allowance for Available-for-Sale Investments 181 Land 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 538 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 581 Depreciation Expense-Store Equipment 582 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 731 Loss on Sale of Investments 741 Unrealized Loss on Trading Investments 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 Labels and Amount Descriptions Labels Current assets Current liabilities December 31, 2013 Amount Descriptions Net income Net loss Other income (loss) Other comprehensive income (loss) Trading investments (at cost) Trading investments (at fair value) Journal 1a Journalize the entries to record 2012 transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your intermediate calculations to two decimal places and round your final answers to the nearest dollar. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 10 11 12 Adjusting Entries 14 16. Journalize the entries to record 2093 transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW joumals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries. CNOWjournals will automatically indent a credit entry when a credit amount is entered. Round your intermediate calculations to two decimal places and round your final answers to the nearest dollar PAGE 11 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Adjusting Entries Balance Sheet 2. Prepare the Trading Investments section of the December 31, 20Y3, balance sheet for Rios Co. Be sure to complete the statement heading. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Colons (') will fill in where needed. Rios Financial Co. Balance Sheet (selected items) (Label) 1 (Label) 3 4 Final Question 3. How are unrealized gains or losses on trading investments presented in the financial statements of Rios Financial Co.? Unrealized gains losses on trading investments are reported on the For 20Y3, Rios Co. would have reported an For 2012, Rios Co. would have reported an If unrealized gains and losses were significant for Rios Co., then they would be