The following are in Jamison Company’s portfolio of long term available for sale securities at December 31, 2010.
|
Cost |
|
|
700 shares of Adler Corporation common stock |
$35,000 |
|
900 shares of Lynn Corporation common stock |
42,000 |
|
800 shares of Swanson Corporation preferred stock |
22,400 |
On December 31, the total cost of the portfolio equaled total fair value. Jamison Company had the following transactions related to the securities during 2011.
|
Jan. 7 |
Sold 700 shares of Adler Corporation common stock at $56 per share, less brokerage fees of $700. |
|
10 |
Purchased 300 shares, $70 par value common stock of Pesavento Corporation at $78 per share, plus brokerage fees of $240. |
|
26 |
Received a cash dividend of $1.15 per share on Lynn Corporation common stock. |
|
Feb. 2 |
Received cash dividends of $0.40 per share on Swanson Corporation preferred stock. |
|
10 |
Sold all 800 shares of Swanson Corporation preferred stock at $26 per share less brokerage fees of $180. |
|
July 1 |
Received a cash dividend of $1.00 per share on Lynn Corporation common stock. |
|
Sept. 1 |
Purchased an additional 800 shares of the $70 par value common stock of Pesavento Corporation at $75 per share, plus brokerage fees of $900. |
|
Dec. 15 |
Received a cash dividend of $1.50 per share on Pesavento Corporation common stock. |
At December 31, 2011, the fair values of the securities were:
|
Lynn Corporation common stock |
$48 per share |
|
Pesavento Corporation common stock |
$72 per share |
Jamison uses separate account titles for each investment, such as Investment in Lynn Corporation Common Stock.
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, 2011, to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2011, for the investment related accounts.