Grass Security, which began operations in 2015, invests in long-term availisbie-
ID: 2590657 • Letter: G
Question
Grass Security, which began operations in 2015, invests in long-term availisbie-for-sale secur roblem 15-3A cording, adjusting, and porting long-term ailable-for-sale curities dl adjusting. and Following is a series of transactions and events determining its long-term investment activit Jan. 20 Purchased 1,000 shares of Johnson&Johnson; at $20.50 per share plus s $240 commission Feb. 9 Purchased 1,200 shares of Sony at $46.20 per share plus a $225 commission. June 12 Purchased 1,500 shares of Mattel at $27.00 per share plus a $195 comaaission. Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $21.50; Mattel, $30.90; 2015 Sony, $38. 2016 Apr. 15 Sold 1,000 shares of Johnson &Johnson; at $23.50 per share less a $525 commission. July 5 Sold 1,500 shares of Mattel at $23.90 per share less a $235 commission. July 22 Purchased 600 shares of Sara Lee at $22.50 per share plus a $480 commission. Aug. 19 Purchased 900 shares of Eastman Kodak at $17 per share plus a $198 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Kodak, S19.25; Sara Lee, $20.00: Sony, S35.00. 2017 Feb. 27 Purchased 2,400 shares of Microsoft at $67.00 per share plus a $525 commission. June 21 Sold 1,200 shares of Sony at $48.00 per share less an $880 commission. June 30 Purchased 1,400 shares of Black&Decker; at $36.00 per share plus a $435 commission. Aug. 3 Sold 600 shares of Sara Lee at $16.25 per share less a $435 commission. Nov. 1 Sold 900 shares of Eastman Kodak at $22.75 per share less a S625 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Black &Decker;, $39.00: Microsoft, $69.00 Required 1. Prepare journal entries to record these transactions and events and any year-end fair value adjustments heck (2a Far vaue Ad. to the portfolio of long-term available-for-sale securities. : 1231/15, $3,650 2. Prepare a table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value V31/16, S 13.818 C1 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 ts Unrealized in at 12/31/2017 $8.040 for the portfolio of long-term available-for-sale securities at each year-end.Explanation / Answer
Grass Security Date Accounts title & Explanation Debit Credit Amount in $ Amount in $ 2 Fair Value adjustment computation-AFS Long term portfolio December 31, 2015 No. of shares Share price at 12/31/15 Fair Value Cost Unrealized gain(Loss) 2015 Johnson & Johnson 1000 21.5 21500 20740 760 Jan-20 Investment in Johnson and Johnson shares 20740 Sony 1200 38 45600 55665 -10065 To cash 20740 Mattel 1500 30.9 46350 40695 5655 Feb-09 Investment in Sony shares 55665 Total 113450 117100 -3650 To cash 55665 Jun-30 Investment in Mattel shares 40695 To cash 40695 Dec-31 Investment in Johnson and Johnson shares 760 Investment in Mattel shares 5655 unrealized loss on investment in shares 3650 Investment in Sony shares 10065 December 31, 2016 No. of shares Share price at 12/31/16 Fair Value at 12/31/16 Cost or previsous fair value Unrealized gain(Loss) 2016 Sony 1000 35 35000 45600 -10600 Apr-15 Cash 22975 Sara Lee 600 20 12000 13980 -1980 Investment in johnson & Johnson shares 21500 Eastman Kodak 900 19.25 17325 15498 1827 Realized gain on sale of Investments 1475 Total 64325 75078 -10753 Jul-05 Cash 35015 Realized loss on sale of Investment 11335 Investment in Mattel shares 46350 Jul-22 Investment in shares of Sara Lee 13980 Cash 13980 Aug-19 Investment in shares of Eastman Kodak 15498 Cash 15498 Dec-31 Investment in shares of Eastman Kodak 1827 unrealized loss on investment in shares 10753 Investment in shares of Sara Lee 1980 Investment in Sony shares 10600 December 31, 2017 No. of shares Share price at 12/31/17 Fair Value Cost Unrealized gain(Loss) 2017 Microsoft 2400 69 165600 161325 4275 Feb-27 Investment in shares of Microsoft 161325 Black & Decker 1400 39 54600 50835 3765 Cash 161325 Total 220200 212160 8040 Jun-21 Cash 56720 Investment in shares of sony 35000 Realized gain on sale of Investment 21720 Jun-30 Investment in shares of Black & Decker 50835 Cash 50835 Aug-03 Cash 9315 Realized loss on sale of Investment 2685 Investment in shares of Sara Lee 12000 Nov-01 Cash 19850 Realized gain on sale of Investment 2525 Investment in shares of Eastman Kodak 17325 Dec-31 Investment in shares of Microsoft 4275 Investment in shares of Black & Decker 3765 Unrealized gain on Investment of shares 8040 3 Realized gain(Losses) 2015 2016 2017 Sale of Johnson & Johnson shares 1475 Sale of Mattel sahres -11335 Sale of sara lee shares -2685 Sale of sony shares 21720 Sale of Eastman Kodak shares 2525 Realized gain(Losses) -9860 21560 Unrealized gain(losses) 2015 2016 2017 Johnson & Johnson 760 Mattel 5655 Sony 10065 -10600 Sara Lee -1980 Eastman Kodak 1827 Microsoft 4275 Black & Decker 3765 Unrealized gain (Losses) 16480 -10753 8040
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