Grass Security, which began operations in 2013, invests in long-term available-f
ID: 2425757 • Letter: G
Question
Grass Security, which began operations in 2013, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity.
2013
Jan. 20 Purchased 2,600 shares of Johnson & Johnson at $22.10 per share plus a $400 commission.
Feb. 9 Purchased 2,800 shares of Sony at $47.80 per share plus a $385 commission.
June 12 Purchased 3,100 shares of Mattel at $28.60 per share plus an $355 commission.
Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $23.10; Mattel, $32.50; Sony, $39.60.
2014
Apr. 15 Sold 2,600 shares of Johnson & Johnson at $25.10 per share less a $685 commission.
July 5 Sold 3,100 shares of Mattel at $25.50 per share less a $395 commission.
July 22 Purchased 2,200 shares of Sara Lee at $24.10 per share plus a $640 commission.
Aug. 19 Purchased 2,500 shares of Eastman Kodak at $18.60 per share plus a $358 commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Kodak, $20.85; Sara Lee, $21.60; Sony, $36.60.
2015
Feb. 27 Purchased 4,000 shares of Microsoft at $68.60 per share plus a $685 commission.
June 21 Sold 2,800 shares of Sony at $49.60 per share less a $1,040 commission.
June 30 Purchased 3,000 shares of Black & Decker at $37.60 per share plus a $595 commission.
Aug. 3 Sold 2,200 shares of Sara Lee at $17.85 per share less a $595 commission.
Nov. 1 Sold 2,500 shares of Eastman Kodak at $24.35 per share less a $785 commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Black & Decker, $40.60; Microsoft, $70.60.
Prepare journal entries to record these transactions and events and any year-end fair value adjustments to the portfolio of long-term available-for-sale securities
Prepare a table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale securities at each year-end
Prepare a table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale securities at each year-end.
1.Prepare journal entries to record these transactions and events and any year-end fair value adjustments to the portfolio of long-term available-for-sale securities
2.Prepare a table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale securities at each year-end
3.Prepare a table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale securities at each year-end.
Explanation / Answer
Solution: 1
20-1-2013 Long term investment AFS (Johnson & Johnson) 57860
To cash..............................................................................57460
To commission....................................................................400
9-2-2013 Long term investment AFS (sony) 134225
To cash..............................................................................133840
To commission....................................................................385
12-6-2013 Long term investment AFS ( Mattel) 89015
To cash..............................................................................88660
To commission....................................................................335
Companies
Cost
Fair Value
Unrealized gain (loss)
Johnson & Johnson
57860
60060
2200
Sony
134225
110880
(23345)
Mattel
89015
100750
11735
Total
281100
271690
(9410)
2014
15-4-2014 Cash................ ......................................................................................... 64575
Loss on sale of Long term investment AFS (Johnson & Johnson) ....685
To Long term investment AFS (Johnson & Johnson).................................65260
5-7-2014 Cash................ ......................................................................................... 78655
Loss on sale of Long term investment AFS (Mattel).................... ....395
To Long term investment AFS (Mattel).............................................79050
22-7-2014 Long term investment AFS (Sara Lee) 53660
To cash..............................................................................53020
To commission....................................................................640
19-8-2014 Long term investment AFS (Eastman Kodak) 46858
To cash..............................................................................46500
To commission....................................................................358
Companies
Cost
Fair Value
Unrealized gain (loss)
Sara Lee
53660
47520
(6140)
Eastern Kodak
46858
52125
5267
Sony
89015
102480
13465
Total
189533
202125
12592
2015
27-2-2015 Long term investment AFS (Microsoft)275085
To cash..............................................................................274400
To commission....................................................................685
21-6-2015 Cash................ ......................................................................................... 138880
Loss on sale of Long term investment AFS (Sony).................... ....1040
To Long term investment AFS (Sony).........................................139920
30-6-2015 Long term investment AFS (Black & Decker)113395
To cash..............................................................................112800
To commission....................................................................595
3-8-2015 Cash................ ......................................................................................... 39270
Loss on sale of Long term investment AFS (Sara Lee).................... ....595
To Long term investment AFS (Sara Lee).........................................39865
1-11-2015 Cash................ ......................................................................................... 60875
Loss on sale of Long term investment AFS (Eastern Kodak).................... ....785
To Long term investment AFS (Eastern Kodak).........................................61660
Companies
Cost
Fair Value
Unrealized gain (loss)
Microsoft
275085
282400
7315
Black & Decker
113395
121800
8405
Total
388480
404200
15720
Companies
Cost
Fair Value
Unrealized gain (loss)
Johnson & Johnson
57860
60060
2200
Sony
134225
110880
(23345)
Mattel
89015
100750
11735
Total
281100
271690
(9410)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.