Question
You are working for The Wellington Company on temporary assignment while one of the accountants is on family leave. You have been asked to review
You are working for The Wellington Company on temporary assignment while one of the accountants is on family leave. You have been asked to review the companys investment journal entries and provide necessary information to the accountant preparing the financial statements.
PAGE 8
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | Jan. 17 | Investments-Red Rock Co. Stock |
| 38,500.00 |
|
|
| |
2 |
| Cash |
|
| 38,500.00 |
|
| |
3 | Feb. 5 | Investments-Sunset Village Bonds |
| 35,000.00 |
|
|
| |
4 |
| Interest Receivable |
| 300.00 |
|
|
| |
5 |
| Cash |
|
| 35,300.00 |
|
| |
6 | 23 | Investments-Mays and Co. Stock |
| 26,250.00 |
|
|
| |
7 |
| Cash |
|
| 26,250.00 |
|
| |
8 | Mar. 31 | Cash |
| 350.00 |
|
|
| |
9 |
| Interest Receivable |
|
| 300.00 |
|
| |
10 |
| Interest Revenue |
|
| 50.00 |
|
| |
11 | Apr. 6 | Investment in Minions Corp. Stock |
| 175,000.00 |
|
|
| |
12 |
| Cash |
|
| 175,000.00 |
|
| |
13 | 30 | Cash |
| 750.00 |
|
|
| |
14 |
| Dividend Revenue |
|
| 750.00 |
|
| |
15 | Jul. 1 | Cash |
| 18,690.00 |
|
|
| |
16 |
| Loss on Sale of Investment |
| 2,520.00 |
|
|
| |
17 |
| Interest Revenue |
|
| 210.00 |
|
| |
18 |
| Investments-Sunset Village Bonds |
|
| 21,000.00 |
|
| |
19 | Aug. 14 | Cash |
| 41,300.00 |
|
|
| |
20 |
| Gain on Sale of Investments |
|
| 1,800.00 |
|
| |
21 |
| Investments-Harding Construction Stock |
|
| 39,500.00 |
|
| |
22 | 27 | Cash |
| 3,500.00 |
|
|
| |
23 |
| Investment in Minions Corp. Stock |
|
| 3,500.00 |
|
| |
24 | Sep. 22 | Cash |
| 29,750.00 |
|
|
| |
25 |
| Gain on Sale of Investments |
|
| 3,500.00 |
|
| |
26 |
| Investments-Mays and Co. Stock |
|
| 26,250.00 |
|
| |
27 | 30 | Cash |
| 140.00 |
|
|
| |
28 |
| Interest Revenue |
|
| 140.00 |
|
| |
29 | Nov. 1 | Investment in Minions Corp. Stock |
| 15,750.00 |
|
|
| |
30 |
| Income of Minions Corp. |
|
| 15,750.00 |
|
| |
31 | Dec. 31 | Unrealized Loss on Available-For-Sale Investments |
| 3,275.00 |
|
|
| |
32 |
| Valuation Allowance for Available-For-Sale Investments |
|
| 3,275.00 |
|
| |
33 | 31 | Valuation Allowance for Trading Investments |
| 2,150.00 |
|
|
| |
34 |
| Unrealized Gain on Trading Investments |
|
| 2,150.00 |
|
|
b. Based on these journal entries, what is the companys investment in Sunset Village bonds at the end of the year?
c. What is the companys investment in Minions Corp. at the end of the year?
d.
Which of the following investments are likely to be available-for-sale securities? Check all that apply.
Sunset Village bonds
Red Rock Co. stock
Cannot be determined
Mays and Co. stock
Harding Construction stock
Minions Corp. stock
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