Paid $100,000 to buy 90-day U.S. Treasury bills (debt securities): $100,000 prin
ID: 2463039 • Letter: P
Question
Paid $100,000 to buy 90-day U.S. Treasury bills (debt securities): $100,000 principal amount, 6% interest, securities dated May 1.
Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 29.
Prepare a table to compare the year-end cost and fair values of Rose's short-term investments in available-for-sale securities. The year-end fair values per share are: Gem Co., $26.50; PepsiCo, $46.50; and Xerox, $13.75.
Apr. 16 Purchased 4,000 shares of Gem Co. stock at $24.25 per share plus a $180 brokerage fee. May 1Paid $100,000 to buy 90-day U.S. Treasury bills (debt securities): $100,000 principal amount, 6% interest, securities dated May 1.
July 7 Purchased 2,000 shares of PepsiCo stock at $49.25 per share plus a $175 brokerage fee. 20 Purchased 1,000 shares of Xerox stock at $16.75 per share plus a $205 brokerage fee. Aug. 3Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 29.
15 Received an $0.85 per share cash dividend on the Gem Co. stock. 28 Sold 2,000 shares of Gem Co. stock at $30 per share less a $225 brokerage fee. Oct. 1 Received a $1.90 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $1.05 per share cash dividend on the remaining Gem Co. shares. 31 Received a $1.30 per share cash dividend on the PepsiCo shares.Explanation / Answer
Solution
Comparison of Cost and Fair Values for AFS Portfolio
Cost
Fair Value
Unrealized Amount
Gem Co.
48590
53000
4470
Pepsi Co.
98675
93000
Xerox
16955
13750
Total
164220
159750
Gem Co.
no
cost
borker
net
Bought
4000
24.25
180
97180
sold
2000
30
225
59775
2000
48590
Pepsi Co.
no
cost
borker
net
Bought
2000
49.25
175
98675
Xerox
no
cost
borker
net
Bought
1000
16.75
205
16955
Comparison of Cost and Fair Values for AFS Portfolio
Cost
Fair Value
Unrealized Amount
Gem Co.
48590
53000
4470
Pepsi Co.
98675
93000
Xerox
16955
13750
Total
164220
159750
Gem Co.
no
cost
borker
net
Bought
4000
24.25
180
97180
sold
2000
30
225
59775
2000
48590
Pepsi Co.
no
cost
borker
net
Bought
2000
49.25
175
98675
Xerox
no
cost
borker
net
Bought
1000
16.75
205
16955
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