Question

Stock Investment Transactions, Trading Securities

Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31:

Year 1
Feb. 14.	Purchased 2,900 shares of Apollo Inc. as a trading security at $44 per share plus a brokerage commission of $580.
Apr. 1.	Purchased 1,400 shares of Ares Inc. as a trading security at $18 per share plus a brokerage commission of $280.
June 1.	Sold 700 shares of Apollo Inc. for $45 per share less an $90 brokerage commission.
June 27.	Received an annual dividend of $0.11 per share on Apollo stock.
Dec. 31.	The portfolio of trading securities was adjusted to fair values of $48 and $19 per share for Apollo Inc. and Ares Inc., respectively.
Year 2
Mar. 14.	Purchased 1,300 shares of Athena Inc. as a trading security at $51 per share plus a $195 brokerage commission.
June 26.	Received an annual dividend of $0.14 per share on Apollo Inc. stock.
July 30.	Sold 200 shares of Athena Inc. for $45 per share less a $60 brokerage commission.
Dec. 31.	The portfolio of trading securities had a cost of $178,985 and fair value of $174,300, requiring a credit balance in Valuation Allowance for Trading Investments of $4,685 ($178,985 - $174,300). Thus, the debit balance from December 31, Year 1 is to be adjusted to the new balance.

Required:

1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.

Date	Description	Debit	Credit
Year 1
Feb. 14	Investments-Apollo Inc.
	Cash
Apr. 1	Investments-Ares Inc.
	Cash
June 1	Cash
	Gain on Sale of Investments
	Investments-Apollo Inc.
June 27	Cash
	Dividend Revenue
Dec. 31	Valuation Allowance for Trading Investments
	Unrealized Gain on Trading Investments
Year 2
Mar. 14
June 26
July 30
Dec. 31

2. Prepare the investment-related current asset balance sheet presentation for Zeus Investments Inc. on December 31, Year 2.

Zeus Investments Inc. Balance Sheet (selected items) December 31, Year 2
Current Assets:

3. How are unrealized gains or losses on trading investments presented in the financial statements of Zeus Investments Inc.?

Unrealized gains or losses are reported in the , often as

Answer 1