The following are in Verbitsky’s Company’s portfolio of long term available for sale securities at December 31, 2012.
|
Cost |
|
|
700 shares of Sasha Corporation common stock |
$35,000 |
|
900 shares of Ukraine Corporation common stock |
42,000 |
|
800 shares of Zaba Corporation preferred stock |
22,400 |
On December 31, the total cost of the portfolio equaled total fair value. Verbitsky’s Company had the following transactions related to the securities during 2013.
|
Jan. |
7 |
Sold 700 shares of Sasha Corporation common stock at $56 per share, less brokerage fees of $700. |
|
10 |
Purchased 300 shares, $70 par value common stock of Vanucci Corporation at $78 per |
|
|
share, plus brokerage fees of $240. |
||
|
26 |
Received a cash dividend of $1.15 per share on Ukraine Corporation common stock. |
|
|
Feb. |
2 |
Received cash dividends of $0.40 per share on Zaba Corporation preferred stock. |
|
10 |
Sold all 800 shares of Zaba Corporation preferred stock at $26 per share less brokerage fees of $180. |
|
|
July |
1 |
Received a cash dividend of $1.00 per share on Ukraine Corporation common stock. |
|
Sept. |
1 |
Purchased an additional 800 shares of the $70 par value common stock of Vanucci |
|
Corporation at $75 per share, plus brokerage fees of $900. |
||
|
Dec. |
15 |
Received a cash dividend of $1.50 per share on Vanucci Corporation common stock. |
At December 31, 2013, the fair values of the securities were:
|
Ukraine Corporation common stock |
$48 per share |
|
Vanucci Corporation common stock |
$72 per share |
Instructions
(a) Prepare journal entries to record the transactions.
(b) Post to the investment accounts. (Use T accounts.)
(c) Prepare the adjusting entry at December 31, 2013, to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2013, for the investment related accounts.