{C} Warning Don\'t show me this message again for the assignment Ok Cancel Warni
ID: 2444788 • Letter: #
Question
{C}
Warning
Don't show me this message again for the assignment
Ok
Cancel
Warning
Don't show me this message again for the assignment
Ok
Cancel
{C}
Warning
Don't show me this message again for the assignment
Ok
Cancel
Date
Account Titles and Explanation
Debit
Credit
12/31/16
Perez Company began operations in 2013. Since then, it has reported the following gains and losses for its investments in trading securities on the income statement:2013 2014 2015 Gains (losses) from sale of trading securities $15,900 $(20,300) $13,600 Unrealized holding losses on valuation of trading securities (24,200) ? (14,200) Unrealized holding gain on valuation of trading securities ? 10,100 ?
At January 1, 2016, Perez owned the following trading securities:
Cost BKD Common (16,000 shares) $448,000 LRF Preferred (1,800 shares) 192,600 Drake Convertible bonds (100 bonds) 114,000
During 2016, the following events occurred:
1. Sold 4,800 shares of BKD for $163,200. 2. Acquired 800shares of Horton Common for $41 per share. Brokerage commissions totaled $1,000.
At 12/31/16, the fair values for Perez's trading securities were:
BKD Common, $27 per share LRF Preferred, $112 per share Drake Bonds, $1,010 per bond Horton Common, $46 per share
{C}
Warning
Don't show me this message again for the assignment
Ok
Cancel
Explanation / Answer
Seurities Fair Value Adjustment (Trading) Account
Securities Fair Value Adjustment (Trading)
+ (Gain) - (Loss)
25,000 Ending Balance 12/31/2013
Adjusting entry on 12/31/2014 35,000
Ending Balance on 12/31/2014 10,000
40,000 Adjusting entry on 12/31/2015
30,000 Ending Balance 12/31/2015
Adjusting entry on 12/31/2016 8,000
22,000 Ending Balance 12/31/2015
Beginning Balance 01/01/2013 $0
Adjusting entry 12/31/2014 ($25,000) Credit
Ending Balance 12/31/2015 ($25,000) Credit Balance
Beginning Balance 01/01/2014 ($25,000) Credit Balance
Adjusting entry 12/31/2014 $35,000 Debit
Ending Balance 12/31/2014 $10,000 Dedit Balance
Beginning Balance 01/01/2015 $10,000 Debit Balance
Adjusting entry 12/31/2015 ($40,000) Credit Balance
Ending Balance 12/31/2015 ($30,000) Credit Balance
Beginning Balance 01/01/2016 ($30,000) Debit Balance
Adjusting entry 12/31/2016 $8,000 Credit Balance
Ending Balance 12/31/2016 ($22,000) Credit Balance
Adjusting Entery at the end of the year
December 31, 2015
Unrealized Holding Gain or Loss- Income 40,000
Securities Fair Value Adjustment (Trading) 40,000
Adjusting entry to bring Trading Securities to Fair Value.
B)
Perez Company
Trading Equity Security Portfolio
December 31, 2015
Investments Cost Fair Value Unrealized Gain (Loss)
BKD Common (10,000 shares) $300,000 $280,000 ($20,000)
LRF Preferred (2,000 shares) 210,000 220,000 10,000
Drake Convertible Bonds (100 Bonds) 115,000 102,000 ($13,000)
Horton Common (1,000 shares) 41,000 42,000 1,000
Total of the Portfolio $666,000 $644,000 ($22,000)
C)
December 31, 2015
Securities Fair Value Adjustment (Trading) 8,000
Unrealized Holding Gain or Loss- Income 8,000
Adjusting entry to bring trading securities to Fair Value.
Previous Securities Fair Value Adjustment Balance (Credit Balance) ($30,000)
Securities Fair Value Adjustment- Dedit $8,000
Ending Balance 12/31/2011 ($22,000) Credit Balance
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.