Question
Transactions for common stock and trading investments Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The following transactions
Transactions for common stock and trading investments
Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The following transactions relate to trading securities acquired by Zeus Inc., which has a fiscal year ending on December 31:
20Y8 | ||
Feb. | 14. | Purchased 2,900 shares of Apollo Inc. common stock at $29 per share plus a brokerage commission of $580. Apollo Inc. has 114,680 shares of common stock outstanding. |
Apr. | 1. | Purchased securities of Ares Inc. as a trading investment for $17,080. |
June | 1. | Sold 700 shares of Apollo Inc. for $30 per share less a $90 brokerage commission. |
June | 27. | Received an annual dividend of $0.12 per share on 2,200 shares of Apollo Inc. stock. |
Oct. | 15. | Sold the remaining shares of Apollo Inc. for $28 per share less a $22 brokerage commission. |
Dec. | 31. | The trading securities of Ares Inc. have a fair value on December 31 of $22,080. |
20Y9 | ||
Mar. | 14. | Purchased securities of Athena Inc. as a trading investment for $44,395. |
July | 30. | Sold securities of Athena Inc. that cost $6,830 for $5,540. |
Dec. | 31. | The fair values of the Ares Inc. and Athena Inc. securities are as follows: |
Issuing Company | Cost | Fair Value |
Ares Inc. | $17,080 | $18,200 |
Athena Inc. | 64,240 | 72,600 |
Required:
1. Journalize the entries to record the preceding transactions, including any December 31 adjusting entries. If an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.
2. Prepare the Trading Investments section of the December 31, 20Y9, balance sheet for Zeus Inc.
3. How are unrealized gains or losses on trading investments presented on the financial statements of Zeus Inc.?
Unrealized gains or losses are reported in the balance sheet , often as Other Asset (Liability)
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