PLEASE ANALYZE (IN WORDS) THE OUTCOME OF THIS PROBLEM. Chaz Corporation prepares
ID: 2432648 • Letter: P
Question
PLEASE ANALYZE (IN WORDS) THE OUTCOME OF THIS PROBLEM.
Chaz Corporation prepares quarterly financial statements and invests its excess funds in marketable securities. At the end of 2018, Chaz's portfolio of trading investments consisted of the following equity securities:
Security
Number of Shares
Cost per Share
Fair Value per Share
Benford Company
600
$66
$66
Gold Inc.
960
43
44
Demi Company
480
70
72
During the first half of 2019, Chaz engaged in the following investment transactions:
Jan. 6
Sold one-half of the Gold shares for $45 per share.
Feb. 3
Purchased 700 shares of Jackson Corporation common stock for $45 per share.
Mar. 31
Dividends of $2,500 were received on the investments, and the following information is available on market prices.
Security
Fair Value per Share
Benford Company
$65
Gold Inc.
45
Demi Company
70
Jackson Corporation
43
Apr. 14
Purchased 360 shares of Jordan Company preferred stock for $52 per share.
May 11
Sold the remainder of the Gold shares for $42 per share.
June 30
Dividends of $2,800 were received on investments, and the following information is available:
Security
Fair Value per Share
Benford Company
$68
Demi Company
69
Jackson Corporation
46
Jordan Company
50
Show the items of income or loss from investment transactions that Chaz reports for each of the first and second quarters of 2019.
Show how the preceding items are reported on the first and second quarter 2019 ending balance sheets, assuming that management expects to dispose of the Benford and Gold securities within the next year.
Security
Number of Shares
Cost per Share
Fair Value per Share
Benford Company
600
$66
$66
Gold Inc.
960
43
44
Demi Company
480
70
72
Explanation / Answer
1st Quarter
Fare value per share of Gold Inc. on Dec. 31=$ 44
Selling Price per share =$ 45
Shares sold=480
Income per share=$ 45-$ 44=$ 1
Benford Company=600 shares
Fare value per share on Dec. 31 2018=$ 66
Fare value per share on Mar. 31 2019=$ 65
Loss per share= $ 1
Gold Inc.=480 shares
Fare value per share on Dec. 31 2018=$ 44
Fare value per share on Mar. 31 2019=$ 45
Income per share= $ 1
Demi Company=480 shares
Fare value per share on Dec. 31 2018=$ 72
Fare value per share on Mar. 31 2019=$ 70
Loss per share= $ 2
Jackson Corporation=700 shares
Purchase price per share on Feb. 3 2019=$ 45
Fare value per share on Mar. 31 2019=$ 43
Loss per share= $ 2
2nd Quarter
Fare value per share of Gold Inc. on Mar. 31=$ 45
Selling Price per share =$ 42
Shares sold=480
Loss per share=$ 42-$ 45=$ 3
Benford Company=600 shares
Fare value per share on Mar. 31 2019=$ 65
Fare value per share on Jun. 30 2019=$ 68
Income per share= $ 3
Demi Company=480 shares
Fare value per share on Mar. 31 2019=$ 70
Fare value per share on Jun. 30 2019=$ 69
Loss per share= $ 1
Jackson Corporation=700 shares
Fare value per share on Mar. 31 2019=$ 43
Fare value per share on Jun. 30 2019=$ 46
Income per share= $ 3
Jordan Company=360 shares
Purchase price per share on Apr. 14 2019=$ 52
Fare value per share on Jun. 30 2019=$ 50
Loss per share= $ 2
1st Quarter
Balance Sheet
Assets:
1)Current Assets
Investments:
Benford Company
Gold Inc.
Demi Company
Jackson Corporation
$ 39000
$ 21600
$ 33600
$ 30100
2nd Quarter
Balance Sheet
Assets:
1)Current Assets
Investments:
Benford Company
Demi Company
Jackson Corporation
Jordan Company
$ 40800
$ 33120
$ 32200
$ 18000
Date Particulars Income Loss Jan. 6Fare value per share of Gold Inc. on Dec. 31=$ 44
Selling Price per share =$ 45
Shares sold=480
Income per share=$ 45-$ 44=$ 1
$ 480 Mar. 31 Dividend received=$ 2500 $ 2500 Mar. 31Benford Company=600 shares
Fare value per share on Dec. 31 2018=$ 66
Fare value per share on Mar. 31 2019=$ 65
Loss per share= $ 1
($ 600) Mar. 31Gold Inc.=480 shares
Fare value per share on Dec. 31 2018=$ 44
Fare value per share on Mar. 31 2019=$ 45
Income per share= $ 1
$ 480 Mar. 31Demi Company=480 shares
Fare value per share on Dec. 31 2018=$ 72
Fare value per share on Mar. 31 2019=$ 70
Loss per share= $ 2
($ 960) Mar. 31Jackson Corporation=700 shares
Purchase price per share on Feb. 3 2019=$ 45
Fare value per share on Mar. 31 2019=$ 43
Loss per share= $ 2
($ 1400) Mar. 31 Total $ 3460 ($ 2960)Related Questions
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