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Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by
Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a fiscal year ending on December 31: 1a. Joumalize the entries to record Year 1 transactions. Refer to the information given and the Criart 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. Question not attempted. Record these transactions on page 10: PAGE 10 Score: 0/138 ACCOUNTING EQUATION JOURNAL Year 1 Feb. DATE POST DESCRIPTION REF DEBIT CREDIT ASSETS LIABILITIEQUITY 1 May 2 3 July 1. Purchased 7,500 shares of Caldwell Inc. as a trading security at $50 per share plus a brokerage commission of $75. 1. Purchased 3,000 shares of Holland Inc. as a trading security at $42 plus a brokerage commission of $90. 1. Sold 4,500 shares of Caldwell Inc. for $46 per share less a $110 brokerage commission, 31. Received an annual dividend of $0.50 per share on Caldwell Inc. stock. 31 The portfolio of trading securities was adjusted to fair values of $47 and $40 per share for Caldwell Inc. and Holland Inc., respectively. 4 5 6 Dec. 7 8 9 Record these transactions on page 11: Adjusting Entries 10 11 12 Year 2 Apr. July Points: 0/27 Oct. 1. Purchased 5,000 shares of Fuller Inc. as a trading security at $25 per share plus a $100 brokerage commission. 31. Received an annual dividend of $0.52 per share on Caldwell Inc. stock. 14. Sold 1,000 shares of Fuller Inc. for $28 per share less a $110 brokerage commission. 31 The portfolio of trading securities had a cost of $376,200 and a fair value of $420,000, requiring a debit balance in Valuation Allowance for Trading Investments of $43,800 $420,000 - $376,200). Thus, the credit balance from December 31, Year 1. is to be adjusted to the new balance. Dec. 10. Joumalize the entries to record Year 2 transactions. 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. Question not attempted. PAGE 11 Score: 0/113 ACCOUNTING EQUATION JOURNAL DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIBQUITY 1 2 Required: 1. Journalize the entries to record these transactions. 2. Prepare the investment-related current asset balance sheet presentation for Rios Financial Co. on December 31, Year 2. 3. How are unrealized gains or losses on trading investments presented in the financial statements of Rios Financial Co.? *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. 3 4 5 6 7 8 Adjusting Entries 9 10 Teedback Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a fiscal year ending on December 31: 2. Prepare the investment-related current asset balance sheet presentation for Rios Financial Co. on December 31, Year 2. 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. Record these transactions on page 10 Year 1 Feb. Score: 0/30 May Question not attempted. Rios Financial Co. Balance Sheet (selected items) December 31, Year 2 1 Current assets 2 3 4 1. Purchased 7,500 shares of Caldwell Inc. as a trading security at $50 per share plus a brokerage commission of $75. 1. Purchased 3,000 shares of Holland Inc. as a trading security at $42 plus a brokerage commission of $90. 1. Sold 4,500 shares of Caldwell Inc. for $46 per share less a $110 brokerage commission. 31. Received an annual dividend of $0.50 per share on Caldwell Inc. stock. 31 The portfolio of trading securities was adjusted to fair values of $47 and $40 per share for Caldwell Inc. and Holland Inc., respectively. July Dec Points: 0/6 Record these transactions on page 11: Feedback Check My Work Year 2 Apr. Calculate the amount of trading investments and adjust for the valuation allowance to obtain Trading investment (at fair value). July Oct. 1. Purchased 5,000 shares of Fuller Inc. as a trading security at $25 per share plus a $100 brokerage commission. 31. Received an annual dividend of $0.52 per share on Caldwell Inc. stock. 14. Sold 1,000 shares of Fuller Inc. for $28 per share less a $110 brokerage commission. 31 The portfolio of trading securities had a cost of $376,200 and a fair value of $420,000, requiring a debit balance in Valuation Allowance for Trading Investments of $43,800 ($420,000 - $376,200). Thus, the credit balance from December 31, Year 1, is to be adjusted to the new balance. Dec. Required: 1. Journalize the entries to record these transactions. 2. Prepare the investment-related current asset balance sheet presentation for Rios Financial Co. on December 31, Year 2." 3. How are unrealized gains or losses on trading investments presented in the financial statements of Rios Financial Co.? "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
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