Exercise 12 5 Various transactions relating to trading securities [LO12 2]
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Rantzow Lear Company buys and sells securities expecting to earn profits on short term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow Lear’s trading account occurred during December 2013 and the first week of 2014. |
| 2013 | |
| Dec. 17 | Purchased 105,000 Grocers’ Supply Corporation preferred shares for $367,500. |
| 28 | Received cash dividends of $2,200 from the Grocers’ Supply Corporation preferred shares. |
| 31 |
Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation preferred shares. The market price of the stock was $4 per share. |
| 2014 | |
| Jan. 5 | Sold the Grocers’ Supply Corporation preferred shares for $399,000 |