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.1Purchased 7,500 shares of Caldwell Inc. common stock at $50 per share plus a brokerage commission of $75. Caldwell has 100,000 shares of common stock outstanding.May1Purchased securities of Holland Inc. as a trading investment for $126,000.July1Sold 4,500 shares of Caldwell Inc. for $46 per share less a $110 brokerage commission. 31Received an annual dividend of $0.50 per share on 3,000 shares of Caldwell Inc. stock.Nov.15Sold the remaining shares of Caldwell Inc. for $51 per share less a $90 brokerage commission.Dec.31The trading securities of Holland Inc. have a fair value on December 31 of $120,000.

Record these transactions on page 11:

20Y3 Apr.1Purchased securities of Fuller Inc. as a trading investment for $125,000.Oct.14Sold securities of Fuller Inc. that cost $25,000 for $30,000.Dec.31The fair values of the Holland Inc. and Fuller Inc. securities are as follows:Issuing CompanyCostFair ValueHolland Inc.$126,000$132,500Fuller Inc.100,000115,600 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 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.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.3.How are unrealized gains or losses on trading investments presented on the financial statements of Rios Co.?

Chart of Accounts

CHART OF ACCOUNTSRios Co.General Ledger ASSETS110Cash111Petty Cash120Accounts Receivable121Allowance for Doubtful Accounts131Notes Receivable132Interest Receivable141Merchandise Inventory145Office Supplies146Store Supplies151Prepaid Insurance161Investments-Caldwell Inc. Stock162Trading Investments-Holland Inc.163Trading Investments-Fuller Inc.165Valuation Allowance for Trading Investments166Valuation Allowance for Available-for-Sale Investments181Land191Store Equipment192Accumulated Depreciation-Store Equipment193Office Equipment194Accumulated Depreciation-Office Equipment LIABILITIES210Accounts Payable221Notes Payable231Interest Payable241Salaries Payable251Sales Tax Payable EQUITY311Common Stock312Paid-In Capital in Excess of Par-Common Stock321Preferred Stock322Paid-In Capital in Excess of Par-Preferred Stock331Treasury Stock332Paid-In Capital from Sale of Treasury Stock340Retained Earnings350Unrealized Gain (Loss) on Available-for-Sale Investments351Cash Dividends352Stock Dividends REVENUE410Sales611Interest Revenue612Dividend Revenue631Gain on Sale of Investments641Unrealized Gain on Trading Investments EXPENSES511Cost of Merchandise Sold512Bad Debt Expense515Credit Card Expense516Cash Short and Over520Salaries Expense531Advertising Expense532Delivery Expense533Repairs Expense534Selling Expenses535Rent Expense536Insurance Expense537Office Supplies Expense538Store Supplies Expense561Depreciation Expense-Store Equipment562Depreciation Expense-Office Equipment590Miscellaneous Expense710Interest Expense731Loss on Sale of Investments741Unrealized Loss on Trading Investments

Labels and Amount Descriptions

Labels Current assets Current liabilities December 31, 20Y3 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 20Y2 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

DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 2 3 4 5 6 7 8 9 10 11 12 13 Adjusting Entries 14 15

1b. Journalize the entries to record 20Y3 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 11

JOURNAL

ACCOUNTING EQUATION

DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 2 3 4 5 6 Adjusting Entries 7 8

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 Co.Balance Sheet (selected items) 1 2 3 4