During the fourth quarter of 2017, Alpha Company acquired the following trading
ID: 2563210 • Letter: D
Question
During the fourth quarter of 2017, Alpha Company acquired the following trading securities:
DATE
Company
# of Shares
Price per Share
10/15
Yankee Company
1,000
$50
10/25
X-ray Company
1,000
35
10/31
Zulu Company
1,000
26
On November 10th, Alpha Company sold the X-ray Company stock for $29 per share. On December 24th, Zulu Company paid dividends of $1.15 per share. The following were the year-end market values.
Company
FMV per Share
Yankee Company
$60
X-ray Company
15
Zulu Company
20
What the total dollar values that Alpha Company should record for the following: (Enter whole dollars only, for loss amounts enter the $ & value inside of the brackets.)
1. Realized Gain/Loss during 2017
2. Unrealized Gain/Loss on Trading Securities for 2017
3. Dividend Income
DATE
Company
# of Shares
Price per Share
10/15
Yankee Company
1,000
$50
10/25
X-ray Company
1,000
35
10/31
Zulu Company
1,000
26
Explanation / Answer
1) Realized Gain/Loss during 2017 = (29-35)*1000 = ($6,000) Answer This is from the sale of the enire 1000 shares in X-ray company. 2) Unrealized gain/loss trading securities: Total Cost Total FMV Yankee company (1000 shares) 50000 60000 Zulu company (1000 shares) 26000 20000 Total 76000 80000 Unrealized gain/loss on trading securities = 80000-76000 = $ 4,000 Answer 3) Dividend income (Zulu Company) = 1000*1.15 = $ 1,150 Answer
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