Question

PLEASE ANALYZE (IN WORDS) THE OUTCOME OF THIS PROBLEM.

Chaz Corporation prepares quarterly financial statements and invests its excess funds in marketable securities. At the end of 2018, Chaz's portfolio of trading investments consisted of the following equity securities:

Security	Number of Shares	Cost per Share	Fair Value per Share
Benford Company	600	$66	$66
Gold Inc.	960	43	44
Demi Company	480	70	72

During the first half of 2019, Chaz engaged in the following investment transactions:

Jan. 6	Sold one-half of the Gold shares for $45 per share.
Feb. 3	Purchased 700 shares of Jackson Corporation common stock for $45 per share.
Mar. 31	Dividends of $2,500 were received on the investments, and the following information is available on market prices. Security Fair Value per Share Benford Company $65 Gold Inc. 45 Demi Company 70 Jackson Corporation 43
Apr. 14	Purchased 360 shares of Jordan Company preferred stock for $52 per share.
May 11	Sold the remainder of the Gold shares for $42 per share.
June 30	Dividends of $2,800 were received on investments, and the following information is available: Security Fair Value per Share Benford Company $68 Demi Company 69 Jackson Corporation 46 Jordan Company 50

Show the items of income or loss from investment transactions that Chaz reports for each of the first and second quarters of 2019.

Show how the preceding items are reported on the first and second quarter 2019 ending balance sheets, assuming that management expects to dispose of the Benford and Gold securities within the next year.

Answer 1

1st Quarter

Date	Particulars	Income	Loss
Jan. 6	Fare value per share of Gold Inc. on Dec. 31=$ 44 Selling Price per share =$ 45 Shares sold=480 Income per share=$ 45-$ 44=$ 1	$ 480
Mar. 31	Dividend received=$ 2500	$ 2500
Mar. 31	Benford Company=600 shares Fare value per share on Dec. 31 2018=$ 66 Fare value per share on Mar. 31 2019=$ 65 Loss per share= $ 1		($ 600)
Mar. 31	Gold Inc.=480 shares Fare value per share on Dec. 31 2018=$ 44 Fare value per share on Mar. 31 2019=$ 45 Income per share= $ 1	$ 480
Mar. 31	Demi Company=480 shares Fare value per share on Dec. 31 2018=$ 72 Fare value per share on Mar. 31 2019=$ 70 Loss per share= $ 2		($ 960)
Mar. 31	Jackson Corporation=700 shares Purchase price per share on Feb. 3 2019=$ 45 Fare value per share on Mar. 31 2019=$ 43 Loss per share= $ 2		($ 1400)
Mar. 31	Total	$ 3460	($ 2960)

2nd Quarter

Date	Particulars	Income	Loss
May. 11	Fare value per share of Gold Inc. on Mar. 31=$ 45 Selling Price per share =$ 42 Shares sold=480 Loss per share=$ 42-$ 45=$ 3		($ 1440)
Jun. 30	Dividend Received=$ 2800	$ 2800
Jun. 30	Benford Company=600 shares Fare value per share on Mar. 31 2019=$ 65 Fare value per share on Jun. 30 2019=$ 68 Income per share= $ 3	$ 1800
Jun. 30	Demi Company=480 shares Fare value per share on Mar. 31 2019=$ 70 Fare value per share on Jun. 30 2019=$ 69 Loss per share= $ 1		($ 480)
Jun. 30	Jackson Corporation=700 shares Fare value per share on Mar. 31 2019=$ 43 Fare value per share on Jun. 30 2019=$ 46 Income per share= $ 3	$ 2100
Jun. 30	Jordan Company=360 shares Purchase price per share on Apr. 14 2019=$ 52 Fare value per share on Jun. 30 2019=$ 50 Loss per share= $ 2		($ 720)
Jun. 30	Total	$ 6700	($ 2640)

1st Quarter

Security	No. of Shares	Fare value per share	Total
Benford Company	600	$ 65	$ 39000
Gold Inc.	480	$ 45	$ 21600
Demi Company	480	$ 70	$ 33600
Jackson Corporation	700	$ 43	$ 30100

Balance Sheet

Particulars	Amount
Assets: 1)Current Assets Investments: Benford Company Gold Inc. Demi Company Jackson Corporation	$ 39000 $ 21600 $ 33600 $ 30100
Total	$ 124300

2nd Quarter

Security	No. of shares	Fare Value per share	Total
Benfons Company	600	$ 68	$ 40800
Demi Company	480	$ 69	$ 33120
Jackson Corporation	700	$ 46	$ 32200
Jordan Company	360	$ 50	$ 18000

Balance Sheet

Particulars	Amount
Assets: 1)Current Assets Investments: Benford Company Demi Company Jackson Corporation Jordan Company	$ 40800 $ 33120 $ 32200 $ 18000
Total	$ 124120