Ryder Company, which began operations in 2011, invests its idle cash in trading securities. The following transactions
Question:
2011
Jan. 20 Purchased 900 shares of Ford Motor Co. at $36 per share plus a $125 commission.
Feb. 9 Purchased 4,400 shares of Lucent at $10 per share plus a $200 commission.
Oct. 12 Purchased 500 shares of Z-Seven at $8 per share plus a $100 commission.
2012
Apr. 15 Sold 900 shares of Ford Motor Co. at $39 per share less a $185 commission.
July 5 Sold 500 shares of Z-Seven at $10.25 per share less a $100 commission.
July 22 Purchased 800 shares of Hunt Corp. at $30 per share plus a $225 commission.
Aug. 19 Purchased 1,000 shares of Donna Karan at $12 per share plus a $100 commission.
2013
Feb. 27 Purchased 3,400 shares of HCA at $22 per share plus a $220 commission.
Mar. 3 Sold 800 shares of Hunt at $25 per share less a $125 commission.
June 21 Sold 4,400 shares of Lucent at $8 per share less a $180 commission.
June 30 Purchased 1,000 shares of Black & Decker at $47.50 per share plus a $195 commission.
Nov. 1 Sold 1,000 shares of Donna Karan at $22 per share less a $208 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, 2013, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities when HCA’s share price is $24 and Black & Decker’s share price is $43.50.
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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Part 1 2011 Jan 20 ShortTerm InvestmentsTrading Ford 32525 Cash 32525 Purchased Ford Motor Co shares ...View the full answer
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Related Book For 
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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