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 6,600 shares of Wilkomm Inc. as a trading security at $43 per share plus a brokerage commission of $660.
Apr.	24	Purchased 1,800 shares of McMarsh Inc. as a trading security at $46 plus a brokerage commission of $198.
Jun.	1	Sold 3,430 shares of Wilkomm Inc. for $41 per share less a $115 brokerage commission.
	30	Received an annual dividend of $0.25 per share on Wilkomm Inc. stock.
Dec.	31	The portfolio of trading securities was adjusted to fair values of $41 and $45 per share for Wilkomm Inc. and McMarsh Inc., respectively.

Record these transactions on page 11:

2017
Apr.	4	Purchased 3,900 shares of Daley Inc. as a trading security at $28 per share plus a $195 brokerage commission.
Jun.	28	Received an annual dividend of $0.40 per share on Wilkomm Inc. stock.
Sep.	9	Sold 780 shares of Daley Inc. for $30 per share less a $45 brokerage commission.
Dec.	31	The portfolio of trading securities had a cost of $307,141 and a fair value of $385,878, requiring a debit balance in Valuation Allowance for Trading Investments of $78,737 ($385,878 -$307,141). 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?

*	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.

CHART OF ACCOUNTS

Scofield Financial Co.

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-Wilkomm Inc.
162	Investments-McMarsh Inc.
163	Investments-Daley Inc.
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

Amount Descriptions

Increase in retained earnings

Net income

Net loss

Other comprehensive income (loss)

Other income (loss)

Retained earnings, December 31, 2017

Retained earnings, January 1, 2017

Trading investments (at cost)

Trading investments (at fair value)

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. 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.

PAGE 10PAGE 11

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10		Adjusting Entries
11
12

Prepare the investment-related current asset balance sheet presentation for Scofield Financial Co. on December 31, 2017. 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.

Scofield Financial Co.

Balance Sheet (selected Current Asset items)

December 31, 2017

1	Current assets:
2
3
4

How are unrealized gains and losses on trading investments presented in the financial statements?

Unrealized gains and losses on trading investments are reported on the (stockholders equity section of the balance sheet/ income statement) . For 2016, Scofield Financial Co. would have reported an (unrealized loss of $8,655 as "Other Comprehensive Income/ unrealized loss of $8,655 as "Other Losses") . For 2017, Scofield Financial Co. would have reported an (unrealized gain of $78,737, as "Other Comprehensive Income/ unrealized gain of $87,392 as "Other Income") . If unrealized gains and losses were significant for Scofield Financial, then they would be (separately disclosed on the balance sheet/ separately disclosed on the income statement)