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Instructions Scofield Financial Co. is a regional insurance company that began operations on January 1, 2016. The following transactions relate to trading securities acquired by
Instructions
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 4,900 shares of Wilkomm Inc. as a trading security at $35 per share plus a brokerage commission of $490. |
Apr. | 24 | Purchased 1,800 shares of McMarsh Inc. as a trading security at $47 plus a brokerage commission of $198. |
Jun. | 1 | Sold 2,550 shares of Wilkomm Inc. for $33 per share less a $95 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 $33 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 $26 per share plus a $240 brokerage commission. |
Jun. | 28 | Received an annual dividend of $0.40 per share on Wilkomm Inc. stock. |
Sep. | 9 | Sold 960 shares of Daley Inc. for $28 per share less a $30 brokerage commission. |
Dec. | 31 | The portfolio of trading securities had a cost of $267,315 and a fair value of $346,935, requiring a debit balance in Valuation Allowance for Trading Investments of $79,620 ($346,935 -$267,315). 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?
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