Grass Security, which began operations in 2017, invests in long-term available-f

Question

Grass Security, which began operations in 2017, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity.

2017

2018

2019

Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale securities at each year-end. (Do not round your intermediate calculations. Loss amounts should be indicated with a minus sign.)

Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale securities at each year-end. (Do not round your intermediate calculations. Losses should be indicated by a minus sign. )

Jan. 20 Purchased 2,500 shares of Johnson & Johnson at $22.00 per share plus a $390 commission. Feb. 9 Purchased 2,700 shares of Sony at $47.70 per share plus a $375 commission. June 12 Purchased 3,000 shares of Mattel at $28.50 per share plus a $345 commission. Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $23.00; Mattel, $32.40; and Sony, $39.50.

Explanation / Answer

ALL FIGURES ARE IN $

SHARE PRICE

ON DEC 31,2017

COST(PURCHASE

PRICE + EXPENSES

DIRECTLY CONNECTED

TO PUCHASE)

UNREALIZED

GAIN/LOSS

SHARE PRICE

AT DEC 31

2018

FAIR

VALUE

UNREALIZED

GAIN/ LOSS

NO OF

SHARES      

SHARE PRICE

AT DEC 31

2019

UNREALIZED

GAIN/ LOSS

Realized Gains (Losses)

(SALES - COST OF SHARES SOLD)

SALES=( NOS*SALES PRICE) - EXPENSE

Sale of Johnson & Johnson shares 2500SH.

(61825-55390)

Fair Value Adjustment Computation - AFS Long-term portfolio          DEC 31, 2017 NO. OF SHARE

SHARE PRICE

ON DEC 31,2017

FAIR VALUE

COST(PURCHASE

PRICE + EXPENSES

DIRECTLY CONNECTED

TO PUCHASE)

UNREALIZED

GAIN/LOSS

JOHNSON 2500 23 57500 55000+390= 55390 2110 SONY 2700 39.50 106650 128790+375=129165 -22515 MATTEL 3000 32.40 97200 85500+345=85845 11355 TOTAL 261350 270400 -9050 DEC 31, 2018 NOS

SHARE PRICE

AT DEC 31

2018

FAIR

VALUE

COST

UNREALIZED

GAIN/ LOSS

KOTAK 2400 20.75 49800 44748 5052 SARALEE 2100 21.50 45150 51030 -5880 SONY 2700 36.50 98550 129165 -30615 TOTAL 193500 224943        -31443

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