Perez company began operations in 2009 since then it has

Reference no: EM13609468

Perez Company began operations in 2009. Since then, it has reported the following gains and losses for its investments in trading securities on the income statement:

2009 2010 2011
Gains (losses) from sale of trading securities $ 15,000 $(20,000) $ 14,000
Unrealized holding losses on valuation of trading securities (25,000) - (30,000)
Unrealized holding gain on valuation of trading securities - 10,000 -

At January 1, 2012, Perez owned the following trading securities:
Cost
BKD Common (15,000 shares) $450,000
LRF Preferred (2,000 shares) 210,000
Drake Convertible bonds (100 bonds) 115,000

During 2012, the following events occurred:
1. Sold 5,000 shares of BKD for $170,000.
2. Acquired 1,000 shares of Horton Common for $40 per share. Brokerage commissions totaled $1,000.

At 12/31/12, the fair values for Perez's trading securities were:
BKD Common, $28 per share
LRF Preferred, $110 per share
Drake Bonds, $1,020 per bond
Horton Common, $42 per share

Instructions
(a) Prepare a schedule which shows the balance in the Securities Fair Value Adjustment (Trading) at December 31, 2011 (after the adjusting entry for 2011 is made).
(b) Prepare a schedule which shows the aggregate cost and fair values for Perez's trading securities portfolio at 12/31/12.
(c) Prepare the necessary adjusting entry based upon your analysis in (b) above.

Reference no: EM13609468

Questions Cloud

Vincent pays 20000 for equipment to use in his trade or : vincent pays 20000 for equipment to use in his trade or business. he pays sales tax of 800 as a result of the purchase.

Tanner furniture company concluded its first year of : tanner furniture company concluded its first year of operations in which it made sales of 800000 all on installment.

You arrive at a bus stop at 800 am knowing that the bus : you arrive at a bus stop at 800 a.m. knowing that the bus will arrive at some time uniformly distributed between 845

When he returns in the evening will his room be warmer or : on a hot summer day a student turns his fan on when he leaves his room in the morning. when he returns in the evening

Perez company began operations in 2009 since then it has : perez company began operations in 2009. since then it has reported the following gains and losses for its investments

Why are noncash transactions such as the exchange of : why are noncash transactions such as the exchange of common stock for a building included on a statement of cash flows?

A network engineer is working to improve password strength : a network engineer is working to improve password strength. if he tells his client that all passwords must contain a

Use the equations of motion with constant acceleration to : an electron is accelerated by a constant electric field of magnitude 270 nc.a find the acceleration of the electron.

Knowing that block b has a constant velosity of 3 ins : block c starts from rest at t 0 and moves downward with a constant accelerration of 4 ins2 . knowing that block b has

User Account

All Pages