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:

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.

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

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 .

Cissi Jean Oliver opened Cleaning Angels, Inc. on March 31, 2019. During April, the following transactions were completed:

Adjusting Data:

A. Services performed for customers through April 30, 2019, but unbilled and uncollected were $3,800.
B. Cleaning Angels used the allowance method to estimate bad debts. Cleaning Angels estimates that 3% of its month-end receivables will not be collected.
C. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $500 salvage value.
D. Record 1 month of insurance expense.
E. An inventory count shows $500 of supplies on hand at April 30.
F. One week of services were performed for the customer who paid in advance on April 15.
G. Accrue for wages owed through April 30, 2019.
H. Accrue for interest expense for 1 month.
I. Cissi Jean estimates a 20% income tax rate. (Hint: Prepare an income statement up to “income before taxes” to help with the income tax calculation.)

Instructions:

1. Journalize the April transactions.
2. Post to ledger accounts.
3. Prepare a Trial Balance as of April 30, 2019.
4. Journalize the adjustments. (Round all amounts to whole dollars.)
5. Post adjusting entries to the ledger accounts.
6. Prepare an adjusted trial balance.
7. Journalize the closing entries.

Possible account titles to use, please:

Describe why the adjusting process is necessary and give an example of one of the following 4 types of adjusting entries:

1) Prepaid expense

2) Unearned revenue

3) Accrued revenue

4) Accrued expense

Make sure to include which type of adjusting entry your are providing an example.

Ashley Somers owns San Diego Art Company, a firm providing designs for advertisers, market analysts, and others. On July 1, the business's general ledger showed the following normal account balances:

The following transactions occurred during the month of July:

Required:

a. Set up accounts for the general ledger accounts with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Dividends; Service Fees Earned; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; and Supplies Expense. Prepare journal entries and record the listed transactions in the appropriate T-accounts.

The pre-1914 value of the British pound to the U.S. dollar was $4.87. (To purchase one pound, one had to pay $4.87.) Following World War I, if the dollar had traded for the pound on an open currency market, the value would have been about $3.50. However, the British government insisted that the pound trade at its pre-war value to the U.S. dollar. Under such an arrangement:

1. Would Great Britain run annual trade surpluses or trade deficits with the USA? Why?

2. Would British goods have been more attractive or less attractive to U.S. consumers? Why?

3. Would there have been an influx of British tourists to the USA, or would there have been an increase in American tourists to Britain? Why?

Note: BOOK : The Fund Industry : How Your Money Is Managed

1. What are the main types of service providers to a mutual fund, which has a board of directors but usually no employees?

2. What is the unique procedure available to fund shareholders for challenging a fund adviser’s management fees as excessive? What factors do courts use in determining excessive fees?

3. What are the critical differences between mutual funds and closed-end funds? Why do you think closed-end funds have declined in popularity relative to mutual funds?

4. How are exchange-traded funds (ETFs) and unit investment trusts (UITs) different from index mutual funds, and from each other?

Red Co. is planning to invest some of its excess cash in 5-year bonds issued by Black Co. and in 2% of ordinary shares of Blue Co. Both Black’s bonds and Blue’s shares are traded actively on securities market. Red Co. plans to hold the bonds until the maturity date and trade the shares in short term. Regarding the accounting for these investments, answer the following questions:

1. How should Red classify the bonds and the shares?

2. What is the accounting treatment for the Black bonds? And what is the accounting treatment for the bonds if Red has the following strategies?

a) an active trading strategy for the bonds or

   b) a plan to sell the bonds in the long run.

3. Identify and explain the different types of classifications for equity investments.

The market for a particular good is described by the following demand and supply equations respectively: QD = 448 – 3.5P and QS = 2.5P – 80. Consider that after much discussion among policymakers and following a final vote, the government implements a 20% ad valorem tax on sellers of the good. The market adjusts and is currently in equilibrium.

1. After the tax is implemented, what quantity of the good is traded?

2. What price do buyers pay?

3. What price do sellers receive?

4. After the tax is implemented, do consumers or producers face any tax burden? If so, then state who faces a higher burden, and what this implies about the group’s price elasticity relative to the other group’s price elasticity.