Question

Grass Security, which began operations in 2013, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity.
2013
Jan. 20 Purchased 1,000 shares of Johnson & Johnson at $ 20.50 per share plus a $ 240 commission.
Feb. 9 Purchased 1,200 shares of Sony at $ 46.20 per share plus a $ 225 commission.
June 12 Purchased 1,500 shares of Mattel at $ 27.00 per share plus an $ 195 commission.
Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $ 21.50; Mattel, $ 30.90; Sony, $ 38.
2014
Apr. 15 Sold 1,000 shares of Johnson & Johnson at $ 23.50 per share less a $ 525 commission.
July 5 Sold 1,500 shares of Mattel at $ 23.90 per share less a $ 235 commission.
July 22 Purchased 600 shares of Sara Lee at $ 22.50 per share plus a $ 480 commission.
Aug. 19 Purchased 900 shares of Eastman Kodak at $ 17 per share plus a $ 198 commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Kodak, $ 19.25; Sara Lee, $ 20.00; Sony, $ 35.00.
2015
Feb. 27 Purchased 2,400 shares of Microsoft at $ 67.00 per share plus a $ 525 commission.
June 21 Sold 1,200 shares of Sony at $ 48.00 per share less a $ 880 commission.
June 30 Purchased 1,400 shares of Black & Decker at $ 36.00 per share plus a $ 435 commission.
Aug. 3 Sold 600 shares of Sara Lee at $ 16.25 per share less a $ 435 commission.
Nov. 1 Sold 900 shares of Eastman Kodak at $ 22.75 per share less a $ 625 commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Black & Decker, $ 39.00; Microsoft, $ 69.00.

Required
1. Prepare journal entries to record these transactions and events and any year-end fair value adjustments to the portfolio of long- term available-for-sale securities.
2. Prepare a table that summarizes the
(a) Total cost,
(b) Total fair value adjustment,
(c) Total fair value of the portfolio of long-term available-for-sale securities at each year- end.
3. Prepare a table that summarizes
(a) The realized gains and losses
(b) The unrealized gains or losses for the portfolio of long-term available-for-sale securities at each year-end.



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  • CreatedNovember 26, 2013
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