WileyPLUS Problem 12-1 In January 2015, the management of Wood Corporation, a pu

Question

WileyPLUS Problem 12-1 In January 2015, the management of Wood Corporation, a publicly-traded company, decides that it has sufficient cash to purchase some debt and equity securities to be held as trading investments. During the year, the following transactions occurred. Feb. 1 Mar. 1 Apr. 1 Purchased 1,500 shares of NJF common shares for $66,000. Purchased 500 shares of SEK common shares for $22,000. Purchased 85 $1,000, 10% CRT bonds for $86,700. Interest is receivable semi-annually on April 1 and October July 1 Aug. 1 Sept. Received a cash dividend of $0.50 per share on the NJF common shares. Sold 200 shares of NJF common shares at $40.40 per share. Received $2 per share cash dividend on the SEK common shares. Oct. 1 Oct. 1 Received the semi-annual interest on the CRT bonds. Sold the CRT bonds for $92,290. At December 31, Wood's fiscal year end, the fair values of the NJF and SEK common shares were $36 and $32 per share, respectively Record the above transactions, including required adjusting journal entries (if any). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Explanation / Answer

Date Account Title Debit Credit 1-Feb Trading Investments-NJF common shares 66000 Cash 66000 66000/1500=44 per share 1-Mar Trading Investments-SEK common shares 22000 Cash 22000 22000/500= 44 per share 1-Apr Trading Investments-10% CRT Bonds 86700 Cash 86700 1-Jul Cash 750 Dividend Revenue 750 1500*0.50 1-Aug Cash 200*40.4 8080 Realised Loss on sale of tr.inv.-NJF 720 Trading Investments-NJF common shares(200*44) 8800 1-Sep Cash 1000 Dividend Revenue 1000 500*2 1-Oct Cash(85000*10%/2) 4250 Interest Revenue 4250 (To Record receipt of interest on CRT bonds) 1-Oct Cash 92290 Trading Investments-10% CRT Bonds 86700 Realised Gain on sale of tr.Inv.-CRT bonds 5590 (To recors sale of CRT bonds) 31-Dec Unrealised loss on Trading investments-NFJ 10400 Trading investments-NFJ 10400 (1500-200)sh.*(44-36) Unrealised loss on Trading investments-SEK 6000 Trading investments-SEK 6000 (500sh.*(44-32) 298190 298190 Net Ledger Bal. LEDGER Posting of the above Jes Debit Credit Debit Credit Cash 66000 Cash 22000 Cash 86700 1-Oct Cash 92290 1-Jul Cash 750 1-Sep Cash 1000 1-Aug Cash 8080 1-Oct Cash 4250 -68330 Dividend Revenue 750 Dividend Revenue 1000 1750 Realised Gain on sale of tr.Inv.-CRT bonds 5590 5590 Interest Revenue 4250 4250 Realised Loss on sale of tr.inv.-NJF 720 720 1-Apr Trading Investments-10% CRT Bonds 86700 Trading Investments-10% CRT Bonds 86700 0 Trading investments-NFJ 10400 1-Feb Trading Investments-NJF common shares 66000 Trading Investments-NJF common shares(200*44) 8800 46800 Trading investments-SEK 6000 1-Mar Trading Investments-SEK common shares 22000 16000 31-Dec Unrealised loss on Trading investments-NFJ 10400 10400 Unrealised loss on Trading investments-SEK 6000 6000 298190 298190 11590 11590 Cash 68330 Dividend Revenue 1750 Trading investments 62800 Interest Revenue 4250 Realised Gain on sale of tr.Inv.-CRT bonds 5590 Realised Loss on sale of tr.inv.-NJF 720 Unrealised loss on Trading investments 16400 Total 79920 79920

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