Jupiter Insurance Co. is a regional insurance company that began operations on January 1, 2010. The following

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Jupiter Insurance Co. is a regional insurance company that began operations on January 1, 2010. The following transactions relate to trading securities acquired by Jupiter Insurance Co., which has a fiscal year ending on December 31:
2010
Feb. 21. Purchased 3,000 shares of Loral Inc. as a trading security at $25 per share plus a brokerage commission of $600.
Mar. 2. Purchased 900 shares of Monarch Inc. as a trading security at $52 per share plus a brokerage commission of $180.
May 3. Sold 800 shares of Loral Inc. for $23.50 per share less a $80 brokerage commission.
June 8. Received an annual dividend of $0.18 per share on Loral Inc. stock.
Dec. 31. The portfolio of trading securities was adjusted to fair values of $24 and $48 per share for Loral Inc. and Monarch Inc., respectively.
2011
May 11. Purchased 1,600 shares of Echelon Inc. as a trading security at $18 per share plus a $160 brokerage commission.
June 11. Received an annual dividend of $0.20 per share on Loral Inc. stock.
Aug. 14. Sold 400 shares of Echelon Inc. for $20 per share less a $80 brokerage commission.
Dec. 31. The portfolio of trading securities was adjusted to fair value using the following fair values per share for the trading securities:
Echelon Inc. $22
Loral Inc. 23
Monarch Inc. 49
The portfolio of trading securities was adjusted to fair value.
Instructions
1. Journalize the entries to record these transactions.
2. Prepare the investment-related current asset balance sheet disclosures for Jupiter Insurance Co. on December 31, 2011.
3. How are unrealized gains or losses on trading investments disclosed on the financial statements of Jupiter Insurance Co.?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Accounting

ISBN: 978-0324662962

23rd Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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