The Welington Company You are working for The Welington Company on temporary assignment while one of the accountants is on tally leave you have been asked to review the company's weatment journal getrios and provide necessary information to the accountant preparing the financial statements PAGE: JOURNAL ACCOUNTING EQUATION DATE POSTRE DEBIT CREDIT LIABILITIES EQUITY DESCRIPTION livestments Red Rock Co Stock ASSETS 1 Jan 17 57.40000 Cash 57400.00 54,000.00 1 Feb Investments Sunset Village Bonds Interest Receivable 29000 1 Gash 34,290,00 23 25,500.00 1 Investments Mays and Co Stock ch 25,500.00 540.00 1 Mar 31 Cash Interest Receivable 290.00 10 50.00 Interest Revenue Oro Investment in Mi Corp Stock 170,000.00 Apr investment in Minions Corp, Stock 170.000.00 Cash 170,000.00 11 50 Cash 750.00 1 14 Dividend Revenue 750.00 JULI Cash 16,666.00 16 Loss on Sale of Investment Interest Revenue 2,244,00 1 210.00 1 Investments-Sunser Village Bonds Aug. 14 Cash 18,700.00 1 41.200.00 10 Gain on Sale of Investments 1,800.00 21 39.400.00 3,400.00 3.400.00 24 Investments Harding Construction Stock 27 Cash Investment in Minions Corp. Stock Sep, 22 Cash Gain on Sale of Investments investments Mays and Co Stock 30 Cash 29.000.00 3,500.00 25,500.00 150.00 Interest Revenue 130,00 SU Cash 130.00 1 21 Interest Revenue 150,00 20 20.400.00 30 20,400.00 51 3,275.00 Nav1 Investment in Minions Corp. Stock Income of Minions Corp Dec 31 Unrealized Loss on Available For Sale Investments Valuation Allowance for Available For Sale Investments 31 Valuation Allowance for Trading Investments Unrealized Gain on Trading Investments 52 3,275.00 2 150.00 2.150.00 Review the journal entries on The Wellington Company panel then answer the following questions Why? 1. Which item is likely to be a trading security? 2 How are brokerage commission fees treated on stock sales vs. stock purchases? 3. Based on these journal entries, what is the company's investment in Sunset Village bonds at the end of the year? 4. The journal entry on Aug 27 most likely shows 5. As an investment, bonds are always categorized as 6. What is the company's investment in Minions Corp, at the end of the year? 7. Which of the following investments are likely to be available for sale securities? Check all that apply Harding Construction stock Mays and Co stock Red Rock Co stock Cannot be determined Sunset Village bonds Minions Corp, stock Financial Statements and Valuation The accountant preparing the financial statements has asked you to provide the fair value as of the end of the year for the investments. Present the information as would be shown on the financial statements. Last year. The Wellington Company reported costs of $68,000 in trading investments and $82,000 in available for sale investments. Refer to the journal entries shown on The Wellington Company panel. Assume that all investments sold during this year were trading Investments and that purchases during the year were now investments 1. Select the correct label for each line and for the amount in classifying the movestments, choose a categorization which seems most they given the panern of transactions in the journal entries. Enter all amounts as positive numbers. I an amount box does not require an entry leave it blank Trading Securities Available-For-Sale Securities 2 Where on the balance sheet do trading securities appear? 3. Where in the financial statements do available for sale securities NOT appear? 2. Where on the balance sheet do trading securities appear? 3. Where in the financial statements de available for sale securities NOT appear? 4. Where are held-to-maturity Securities reported? Based on the journal entries for this year, does the company have any held-to- maturity securities? 5. Where are securities held for strategic reasons reported in the financial statements when using the equally method? Based on the journal entries for this year, does The Wellington Company have any equity series? 6. Which of the following items does not affect net income? Check all that apply unrealized lost on trading securities only unrealized gains or losses for all investments none of these answers is correct realized loss on available for sale securities unrealized gain on avalabile-for-sale securities realced gain on trading securities both gains and losses of any sort for all investments