Rose Company had no short-term investments prior to year 2017. It had the follow

Question

Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017 Apr. 16 Purchased 10,800 shares of Gem Co. stock at $27.25 per share plus a $480 brokerage fee. May 1 Paid $150,000 to buy 3-month U.S. Treasury bills (debt securities): $150,000 principle munt, 6% interest, July 7 Purchased 5,800 shares of Pepsico stock at $46.80 per share plus a $378 brokerage fee. Aug. 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31. securities mature on July 31. 28 Purchased 2,500 shares of Xerox stock at $17.80 per share plus a $458 brokerage fee. 15 Received a(n) se.85 per share cash dividend on the Gem Co. stock. 28 Sold 5,e80 shares of Gem Co. stock at $34.00 per share less a $498 brokerage fee. Oct. 1 Received a $1.58 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $1.00 per share cash dividend on the remaining Gem Co. shares 31 Received a $1.48 per share cash dividend on the Pepsico shares. Problem 15-2A Part 2 2. Prepare a table to compare the year-end cost and fair values of Rose's short-term investments in available-for-sale securities. The end fair values per share are: Gem Co. $29.50: PepsiCo, $43.25; and Xerox, $14.00, Comparison of Cost and Fair Values for AFS Portfolio Fair Value Unrealized Amount Cost Gem Co Pepsi Co. Xerox Total 6c 7 of 10 Next >

Explanation / Answer

Answer 2. Comparison of Cost and Fair Values for AFS Portfolio No. of Shares Cost Fair Value Unrealized Amount Gem Co      5,000.00    136,450.00    147,500.00          11,050.00 Pepsi Co      5,000.00    230,370.00    216,250.00        (14,120.00) Xerox      2,500.00      42,950.00      35,000.00          (7,950.00) Total    409,770.00    398,750.00        (11,020.00) Answer 3. Journal Entry Date Particulars Dr. Amt. Cr.Amt. 31-Dec-17 Unrealized Loss - Equity    11,020.00    Fair Value Adjustment - AFS    11,020.00

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