Question: Protom company which began operations in 2009 invests its idle

Protom Company, which began operations in 2009, invests its idle cash in trading securities. The following transactions are from its short-term investments in its trading securities.
2009
Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share plus a $120 commission.
Feb. 9 Purchased 2,600 shares of Lucent at $39 per share plus a $578 commission.
Oct. 12 Purchased 800 shares of Z-Seven at $7.50 per share plus a $200 commission.
2010
Apr. 15 Sold 800 shares of Ford Motor Co. at $30 per share less a $300 commission.
July 5 Sold 800 shares of Z-Seven at $11 per share less a $103 commission.
July 22 Purchased 2,000 shares of Hunt Corp. at $39 per share plus a $444 commission.
Aug.19 Purchased 1,600 shares of Donna Karan at $19.50 per share plus a $290 commission.
2011
Feb. 27 Purchased 3,500 shares of HCA at $31 per share plus a $420 commission.
Mar. 3 Sold 2,000 shares of Hunt at $35 per share less a $250 commission.
June 21 Sold 2,600 shares of Lucent at $36.75 per share less a $420 commission.
June 30 Purchased 1,300 shares of Black & Decker at $47.50 per share plus a $595 commission.
Nov. 1 Sold 1,600 shares of Donna Karan at $19.50 per share less a $309 commission.
Required
1. Prepare journal entries to record these short-term investment activities for the years shown. (Ignore any year-end adjusting entries.)
2. On December 31, 2011, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities when HCA’s share price is $33 and Black & Decker’s share price is $43.50. (Assume the Fair Value Adjustment—Trading account had an unadjusted balance of zero.)

View Solution:


Sale on SolutionInn
Sales0
Views80
Comments
  • CreatedMarch 18, 2015
  • Files Included
Post your question
5000