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
The balance sheet caption used to report long-term investments in stocks not intended as a source of cash in the normal operations of the business.
journal entries and provide necessary information to the accountant preparing the financial statements.
PAGE 8
JOURNAL
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
|---|---|---|---|---|---|
| 1 | Jan. 17 | Investment-Red Rock Co. Stock |
| 37,400.00 |
|
| 2 |
| Cash |
|
| 37,400.00 |
| 3 | Feb. 5 | Investment-Sunset Village Bonds |
| 34,000.00 |
|
| 4 |
| Interest Receivable |
| 290.00 |
|
| 5 |
| Cash |
|
| 34,290.00 |
| 6 | 23 | Investment-Mays and Co. Stock |
| 25,500.00 |
|
| 7 |
| Cash |
|
| 25,500.00 |
| 8 | Mar. 31 | Cash |
| 340.00 |
|
| 9 |
| Interest Receivable |
|
| 290.00 |
| 10 |
| Interest Revenue |
|
| 50.00 |
| 11 | Apr. 6 | Investment in Minions Corp. Stock |
| 170,000.00 |
|
| 12 |
| Cash |
|
| 170,000.00 |
| 13 | 30 | Cash |
| 750.00 |
|
| 14 |
| Dividend Revenue |
|
| 750.00 |
| 15 | Jul. 1 | Cash |
| 18,162.00 |
|
| 16 |
| Loss on Sale of Investments |
| 2,448.00 |
|
| 17 |
| Interest Revenue |
|
| 210.00 |
| 18 |
| Investment-Sunset Village Bonds |
|
| 20,400.00 |
| 19 | Aug. 14 | Cash |
| 41,300.00 |
|
| 20 |
| Gain on Sale of Investments |
|
| 1,800.00 |
| 21 |
| Investment-Harding Construction Stock |
|
| 39,500.00 |
| 22 | 27 | Cash |
| 3,400.00 |
|
| 23 |
| Investment in Minions Corp. Stock |
|
| 3,400.00 |
| 24 | Sep. 22 | Cash |
| 29,000.00 |
|
| 25 |
| Gain on Sale of Investments |
|
| 3,500.00 |
| 26 |
| Investment-Mays and Co. Stock |
|
| 25,500.00 |
| 27 | 30 | Cash |
| 130.00 |
|
| 28 |
| Interest Revenue |
|
| 130.00 |
| 29 | Nov. 1 | Investment in Minions Corp. Stock |
| 15,300.00 |
|
| 30 |
| Income of Minions Corp. |
|
| 15,300.00 |
| 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
|
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.
| Trading Securities | |
| Trading investments at cost | ? |
| Plus valuation allowance for trading investments | 2150 |
| Trading investments at fair value | ? |
| Available-For-Sale Securities | |
| Available-for-sale investments at cost | ? |
| Less valuation allowance for available-for-sale investments | 3275 |
| Available-for-sale investments at fair value | ? |
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Strategic Pricing And Management Accounting
Authors: David Dugdale
1st Edition
78-1032224824, 1032224827
