Jets Bancorp Inc. purchased a portfolio of trading securities
Securities that management intends to actively trade for profit.
during 2016. The cost and fair value of this portfolio on December 31, 2016, was as follows:
Question not attempted.
1 | Name | Number of Shares | Total Cost | Total Fair Value |
2 | Dolphins Inc. | 1,310.00 | $26,200.00 | $28,820.00 |
3 | Marino Company | 1,260.00 | 32,760.00 | 28,980.00 |
4 | Namath Company | 840.00 | 30,240.00 | 27,720.00 |
5 | Total | | $89,200.00 | $85,520.00 |
On May 10, 2017, Jets Bancorp Inc. purchased 1,020 shares of Giants Inc. at $25 per share plus a $155 brokerage commission.
Required:
A. | Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles and be sure to enter the year as part of the date): | The adjustment of the trading security portfolio to fair value on December 31, 2016. | | The May 10, 2017, purchase of Giants Inc. stock. CHART OF ACCOUNTS | Jets Bancorp Inc. | 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-Giants Inc. Stock | 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 Provide the journal entries. Refer to the Chart of Accounts for exact wording of account titles. Be sure to enter the year as part of the date. PAGE 10 JOURNAL | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | 1 | | | | | | 2 | | | | | | 3 | | | | | | 4 | | | | | | Solution | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | 1 | | | | | | 2 | | | | | | 3 | | | | | | 4 | | | | | | | | | REVENUE | 410 | Sales | 611 | Interest Revenue | 612 | Dividend Revenue | 621 | Income of Giants Inc. | 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 | 721 | Loss of Giants Inc. | 731 | Loss on Sale of Investments | 741 | Unrealized Loss on Trading Investments | | | |