Question

In: Accounting

Question No. 03: Sun Corporation's trading portfolio of stock investments consisted of the following on December...

Question No. 03:

Sun Corporation's trading portfolio of stock investments consisted of the following on December 31, 2019:

Stock Number of Shares Cost

Can Common Stock 200 $30,000

Ares Preferred Stock 300 9,000

Han Common Stock 500 10,000

$43,000

During 2019, the following transactions took place:

Feb. 5 Sold 100 shares of Can common stock for $20,000.

Mar. 30 Purchased 75 shares of Han common stock for $20 per share.

Sept. 9 Sold 275 shares of Han common stock for $8,250.

At year-end on December 31, 2019, the fair values per share were:

Fair Value Per Share

Can Common Stock $160

Ares Preferred Stock $25

Han Common Stock $25

Instructions

(a) Prepare the journal entries to record the 2019 stock transactions.

(b) On December 31, 2019, prepare any adjusting entry that might be necessary relative to the trading portfolio.

(c) Show how the stock investments will appear on Sun Corporation's balance sheet on December 31, 2019.

Expert Solution

ekkarill92 answered 1 year ago

At December 31, 2020, the investments in the portfolio of the trading securities of Mac Company...

At December 31, 2020, the investments in the portfolio of the trading securities of Mac Company included the following: Atlanta Corp. bonds, 5%, $100,000 face value, purchased on Oct. 1, 2020 at par Dallas Inc. bonds, 4%, $50,000 face value, purchased on July 1, 2020 at par Required: Record the receipt of quarterly interest from the Atlanta Corp. bonds on December 31, 2020. Record the receipt of semiannual interest from the Dallas Inc. bonds on December 31, 2020. Record the...

1. On December 31, Mars Co. had the following portfolio of stock investments with insignificant influence....

1. On December 31, Mars Co. had the following portfolio of stock investments with insignificant influence. Mars had no stock investments in prior periods. Stock Investments Cost Fair Value Apple stock $ 6,500 $ 8,600 Chipotle stock 3,300 1,800 Under Armour stock 12,800 14,300 Prepare the December 31 adjusting entry to report these investments at fair value. Record the year-end adjustment to fair value, if any. 2. Carlsville Company began operations in the current year and had no prior stock...

Jia Inc. has the following securities in its investments portfolio on December 31, 2010. These investments...

Jia Inc. has the following securities in its investments portfolio on December 31, 2010. These investments were purchased within 2010. i. 700 shares of Wirjanto Corp. common shares, which cost $20,000 and had a fair value of $25,000 at the end of 2010. This is accounted for by Jia Inc. as an Available-For-Sale investment. ii. 900 shares of MLT Corp. common shares, which cost $30,000 and had a fair value of $45,000 at the end of 2010. This is accounted for...

Here is Blossom Company’s portfolio of long-term stock investments at December 31, 2018, the end of...

Here is Blossom Company’s portfolio of long-term stock investments at December 31, 2018, the end of its first year of operations. Cost 1,350 shares of Batone Inc. common stock $71,010 1,100 shares of Mendez Corporation common stock 73,700 760 shares of P. Tillman Corporation preferred stock 32,680 On December 31, the total cost of the portfolio equaled the total fair value. Blossom had the following transactions related to the securities during 2019. Jan. 20 Sold 1,350 shares of Batone Inc....

Marigold Company has the following investments as of December 31, 2020: Investments in common stock of...

Marigold Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,090,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Marigold’s stock investments does not result in significant influence on the operations of Laser Company. Marigold’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued...

Sarasota Company has the following investments as of December 31, 2020: Investments in common stock of...

Sarasota Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,630,000 Investment in debt securities of FourSquare Company $3,240,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Sarasota’s stock investments does not result in significant influence on the operations of Laser Company. Sarasota’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued...

Metlock Company has the following investments as of December 31, 2017: Investments in common stock of...

Metlock Company has the following investments as of December 31, 2017: Investments in common stock of Laser Company $1,500,000 Investment in debt securities of FourSquare Company $3,140,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2017. Metlock’s stock investments does not result in significant influence on the operations of Laser Company. Metlock’s debt investment is considered held-to-maturity. At December 31, 2018, the shares in Laser Company are valued...

For the following investments, identify whether they are: A. Trading

For the following investments, identify whether they are: A. Trading B. Available-for-Sale C. Held-to-Maturity D. None of the above A letter may be used more than once or not at all. (5 points) ____ 1. Preferred stock was purchased in the previous year. The company intends to hold it for several more years. ____ 2. 5-year bonds were purchased this year. The company plans to sell the bonds immediately after...

Johnson Inc.’s non-strategic investment portfolio at December 31, 2019, consisted of the following: Debt and Equity...

Johnson Inc.’s non-strategic investment portfolio at December 31, 2019, consisted of the following: Debt and Equity Investments* Cost Fair Value 10,200 Xavier Corp. common shares $ 166,770 $ 147,900 1,350 Young Inc. common shares 70,200 66,960 122,000 Zed Corp. common shares 40,600 36,200 *The fair value adjustments were recorded on December 31, 2019. Johnson had no other debt and equity investments at December 31, 2019, other than those shown above. During 2020, Johnson engaged in the following transactions: 2020 Jan....

You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A...

You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $200,000 1.35 B 200,000 1.60 C 400,000 0.85 D 200,000 -0.20 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.