you are working for the Wellington company on temporary assignment while one

Mastery Problem: Investments and Fair Value Accounting The Wellington Company Investments Financial Statements and Valuation The Wellington Company You are working for The Wellington Company ontemporary assignment while one of the accountants is on family leave. You have been asked to review the compa Investment journal entries and provide necessary information to the accountant preparing the finance statements ACCOUNTING EQUATIC DECEPTION Jan 17 Investments Red Rock Stock Febs vest Sur g eonds DO Investments Financial Statements and Valuation The Wellington Company DESCRIPTION Jan. 17 Investments Red Rock Co. Stock 40,700.00 Cash 40.700.00 Feb. 5 Investments-Sunset Village Bonds 37,000.00 Interest Receivable 320.00 Cash 37,320.00 27.750,00 23 Investments-Mays and Co. Stock 27.750.00 Cash 370.00 Mar. 31 Cash 320.00 Interest Receivable ne vemington Company Interest Revenue Apr. 6 Investment in Minions Corp. Stock 50.00 185,000.00 Cash 185.000.00 30 Cash 800.00 Dividend Revenue 800.00 Cash 19,746.00 2,664.00 Loss on Sale of Investment 210.00 Interest Revenue 22.200,00 Investments-Sunset Village Bonds 41.200,00 Aug, 14 Cash Investments Financial Statements and Valuation 1.800.00 39,400.00 3.700.00 The Wellington Company Gain on Sale of Investments Investments-Harding Construction Stock 27 Cash Investment in Minions Corp. Stock Sep. 22 Cash Gain on Sale of Investments Investments-Mays and Co. Stock 3.700.00 31.250.00 3.500.00 27.750,00 160.00 30 Cash 160.00 Interest Revenue 22.200.00 Nov. 1 Investment in Minions Corp. Stock The Wellington Company Feash 160000 Interest Revenue 160.00 Nov. 1 Investment in Minions Corp. Stock 22,200.00 22,200.00 Dec. 31 Income of Minions Corp. Unrealized Loss an Available-For Sale Investments Valuation Allowance for Available For Sale Investments 3,275.00 3.275.00 Valuation Allowance for Trading Investments 2.150,00 Unrealized Gain on Trading Investments 2.150.00 Investments Financial Statements and Valuation The Wellington Company Investments Review the journal entries on The Wellington Company panel then answer the following questions 1. Which item is likely to be a trading security? Why? 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? S 7. Which of the following investments are likely to be available for sale securities? Check all that apply 7. Which of the following investments are likely to be available for sale securities? Check out therapy Cannot be determined Sunset Village bonds Harding Construction stock Mays and Co stock Red Rock Costock 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 it 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 new investments 1. Select the correct label for each line and fill in the amount in classifying the investments, choose a categorization which seems most key given the patter of transactions in the journal entries. Enter all amounts as positive numbers. Wan anunt box does not require an entry leave blank Trading Securities Financial Statements and Valuation 2. Where on the balance sheet do trading securities appear? 3. Where is the gain or loss from the change in value of available for sale securities reported in the financial statements 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 equity method? Based on the journal entries for this year, does The Wellington Company have any equity securities? 6. Which of the following items does not affect net income? Check all that apply Valuation 6. Which of the following items does not affect net income? Check all that apply. Both gains and losses of any sort for all investments Only unrealized gains or losses for all investments. Unrealized gain on available for sale securities Unrealized loss on trading securities Realized gain on trading securities Realized loss on available for sale securities None of these answers is correct Mastery Problem: Investments and Fair Value Accounting The Wellington Company Investments Financial Statements and Valuation The Wellington Company You are working for The Wellington Company ontemporary assignment while one of the accountants is on family leave. You have been asked to review the compa Investment journal entries and provide necessary information to the accountant preparing the finance statements ACCOUNTING EQUATIC DECEPTION Jan 17 Investments Red Rock Stock Febs vest Sur g eonds DO Investments Financial Statements and Valuation The Wellington Company DESCRIPTION Jan. 17 Investments Red Rock Co. Stock 40,700.00 Cash 40.700.00 Feb. 5 Investments-Sunset Village Bonds 37,000.00 Interest Receivable 320.00 Cash 37,320.00 27.750,00 23 Investments-Mays and Co. Stock 27.750.00 Cash 370.00 Mar. 31 Cash 320.00 Interest Receivable ne vemington Company Interest Revenue Apr. 6 Investment in Minions Corp. Stock 50.00 185,000.00 Cash 185.000.00 30 Cash 800.00 Dividend Revenue 800.00 Cash 19,746.00 2,664.00 Loss on Sale of Investment 210.00 Interest Revenue 22.200,00 Investments-Sunset Village Bonds 41.200,00 Aug, 14 Cash Investments Financial Statements and Valuation 1.800.00 39,400.00 3.700.00 The Wellington Company Gain on Sale of Investments Investments-Harding Construction Stock 27 Cash Investment in Minions Corp. Stock Sep. 22 Cash Gain on Sale of Investments Investments-Mays and Co. Stock 3.700.00 31.250.00 3.500.00 27.750,00 160.00 30 Cash 160.00 Interest Revenue 22.200.00 Nov. 1 Investment in Minions Corp. Stock The Wellington Company Feash 160000 Interest Revenue 160.00 Nov. 1 Investment in Minions Corp. Stock 22,200.00 22,200.00 Dec. 31 Income of Minions Corp. Unrealized Loss an Available-For Sale Investments Valuation Allowance for Available For Sale Investments 3,275.00 3.275.00 Valuation Allowance for Trading Investments 2.150,00 Unrealized Gain on Trading Investments 2.150.00 Investments Financial Statements and Valuation The Wellington Company Investments Review the journal entries on The Wellington Company panel then answer the following questions 1. Which item is likely to be a trading security? Why? 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? S 7. Which of the following investments are likely to be available for sale securities? Check all that apply 7. Which of the following investments are likely to be available for sale securities? Check out therapy Cannot be determined Sunset Village bonds Harding Construction stock Mays and Co stock Red Rock Costock 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 it 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 new investments 1. Select the correct label for each line and fill in the amount in classifying the investments, choose a categorization which seems most key given the patter of transactions in the journal entries. Enter all amounts as positive numbers. Wan anunt box does not require an entry leave blank Trading Securities Financial Statements and Valuation 2. Where on the balance sheet do trading securities appear? 3. Where is the gain or loss from the change in value of available for sale securities reported in the financial statements 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 equity method? Based on the journal entries for this year, does The Wellington Company have any equity securities? 6. Which of the following items does not affect net income? Check all that apply Valuation 6. Which of the following items does not affect net income? Check all that apply. Both gains and losses of any sort for all investments Only unrealized gains or losses for all investments. Unrealized gain on available for sale securities Unrealized loss on trading securities Realized gain on trading securities Realized loss on available for sale securities None of these answers is correct