Stock Investment Transactions, Trading Securities Ophir Investments Inc. is a re
ID: 2445452 • Letter: S
Question
Stock Investment Transactions, Trading Securities
Ophir Investments Inc. is a regional investment company that began operations on January 1, 2014. The following transactions relate to trading securities acquired by Ophir Investments Inc., which has a fiscal year ending on December 31:
2014
Required:
1. Journalize the entries to record these transactions. For a compound transaction, 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 investment-related current asset balance sheet presentation for Ophir Investments Inc. on December 31, 2015.
Feb. 3. Purchased 3,100 shares of Mapco Inc. as a trading security at $27 per share plus a brokerage commission of $620. Mar. 23. Purchased 1,500 shares of Swift Inc. as a trading security at $11 per share plus a brokerage commission of $300. May 19. Sold 700 shares of Mapco Inc. for $28 per share less an $90 brokerage commission. June 12. Received an annual dividend of $0.16 per share on Mapco stock. Dec. 31. The portfolio of trading securities was adjusted to fair values of $31 and $12 per share for Mapco Inc. and Swift Inc., respectively. 2015 Apr. 9. Purchased 1,400 shares of Corvair Inc. as a trading security at $32 per share plus a $210 brokerage commission. June 15. Received an annual dividend of $0.19 per share on Mapco Inc. stock. Aug. 30. Sold 300 shares of Corvair Inc. for $26 per share less a $90 brokerage commission. Dec. 31. The portfolio of trading securities had a cost of $117,445 and fair value of $113,300, requiring a credit balance in Valuation Allowance for Trading Investments of $4,145 ($117,445 - $113,300). Thus, the debit balance from December 31, 2014 is to be adjusted to the new balance.Explanation / Answer
Date Amount (in $) Debit Credit 2014 Feb. 3 Investments-Mapco Inc 84320 Cash 84320 Mar. 23 Investments-Swift Inc. 16800 Cash 16800 May-19 Cash 19510 Gain on Sale of Investments 610 Investments-Mapco Inc. 18900 Jun-12 Cash 384 Dividend Revenue Investments-Mapco Inc. 384 Dec. 31 Valuation Allowance for Trading Investments 11100 Unrealized Gain on Trading Investments 11100 2015 Apr. 9 Investments-Corvair Inc. 45010 Cash 45010 Jun-15 Cash 456 Dividend Revenue Investments-Mapco Inc. 456 Aug. 30 Cash 7710 Loss on Sale of Investments 1890 Investments-Corvair Inc. 9600 Dec. 31 Unrealized Loss on Trading Investments 4145 Valuation Allowance for Trading Investments 4145 Ophir Investments Inc. Balance Sheet (selected Current Asset items) December 31, 2015 Current Assets: Trading Investments (at Fair Value) $113,300 Plus Valuation Allowance For Trading Investments $4,145 Trading Investments (at Cost) $117,445
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