Jupiter Insurance Co. is an insurance company that began operations on January 1, 2015. The following transactions
Question:
Jupiter Insurance Co. is an insurance company that began operations on January 1, 2015. The following transactions relate to held-for-trading investments acquired by Jupiter Insurance Co., which has a fiscal year ending on December 31:
2015
Feb. 21. Purchased 3,000 shares of Loral Ltd. as a held-for-trading investment at $25 per share plus a brokerage commission of $600.
Mar. 2. Purchased 900 shares of Monarch Inc. as a held-for-trading investment at $52 per share plus a brokerage commission of $180.
May 3. Sold 800 shares of Loral Ltd. for $23.50 per share less an $80 brokerage commission.
Jun. 8. Received an annual dividend of $0.18 per Loral Ltd. share.
Dec. 31.The held-for-trading investments were adjusted to fair values of $24 and $48 per share for Loral Ltd. and Monarch Inc., respectively.
2016
May 11. Purchased 1,600 shares of Echelon Co. as a held-for-trading investment at $18 per share plus a $160 brokerage commission.
Jun. 11. Received an annual dividend of $0.20 per Loral Ltd. share.
Aug. 14. Sold 400 shares of Echelon Co. for $20 per share less an $80 brokerage commission.
Dec. 31. The held-for-trading investments were adjusted to fair value using the following fair values per share for the held-for-trading securities:
Echelon Co. .....................$22
Loral Ltd. ........................ 23
Monarch Inc. ..................... 49
Instructions
1. Journalize the entries to record these transactions.
2. Prepare the investment-related current asset statement of financial position disclosures for Jupiter Insurance Co. on December 31, 2016.
3. How are unrealized holding gains or losses on held-for-trading investments disclosed in the financial statements of Jupiter Insurance Co.?
Financial StatementsFinancial 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... 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...
Step by Step Answer:
1 2015 Feb 21 HeldforTrading InvestmentsLoral Ltd 75000 Brokerage Fees Expense 600 Cash 75600 3000 shares 25 per share Mar 2 HeldforTrading InvestmentsMonarch Inc 46800 Brokerage Fees Expense 180 Cash 46980 900 shares 52 per share May 3 Cash 18720 Brokerage Fees Expense 80 Loss on Sale of Investments 1200 HeldforTrading InvestmentsLoral Ltd 20000 800 shares 2350 per share 80 800 shares 750003000 shares June 8 Cash 396 Dividend Revenue 396 3000 shares 800 shares 018 Dec 31 Unrealized Loss on HeldforTrading Investments 5800 HeldforTrading InvestmentsLoral Ltd 2200 HeldforTrading InvestmentsMonarch Inc 3600 Total Cost Fair Value Dec 31 2015 Change Loral Ltd 55000 52800 2200 Monarch Inc 46800 43200 3600 101800 96000 5800 75000 20000 2200 shares x 24 900 shares x 48 2016 May 11 HeldforTrading InvestmentsEchelon Co 28800 Brokerage Fees Expense 160 Cash 28960 1600 shares 18 per share June 11 Cash 440 Dividend Revenue 440 2200 shares 020 per share Aug 14 Cash 7920 Brokerage Fees Expense 80 Gain on Sale of Investment ...View the full answer
Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren
