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Perry Company had no short-term investments prior to year 2011. Ithad the following transactions involving short-term investments inavailable-for-sale securities during 2011.



Apr. 16 Purchased 8,000 shares of Gem Co. stock at $24.25 per shareplus a $360 brokerage fee.
May 1 Paid $200,000 to buy 90-day U.S. Treasury bills (debtsecurities): $200,000 principal amount, 6% interest, securitiesdated May 1.
July 7 Purchased 4,000 shares of PepsiCo stock at $49.25 per shareplus a $350 brokerage fee.
20 Purchased 2,000 shares of Xerox stock at $16.75 per share plus a$410 brokerage fee.
Aug. 3 Received a check for principal and accrued interest on theU.S. Treasury bills that matured on July 29.
15 Received an $0.85 per share cash dividend on the Gem Co.stock.
28 Sold 4,000 shares of Gem Co. stock at $30 per share less a $450brokerage fee.
Oct. 1 Received a $1.90 per share cash dividend on the PepsiCoshares.
Dec. 15 Received a $1.05 per share cash dividend on the remainingGem Co. shares.
31 Received a $1.30 per share cash dividend on the PepsiCoshares.


Prepare journal entries to record the preceding transactions andevents.

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Nelly Stracke
Nelly StrackeLv2
28 Sep 2019

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Rose Company had no short-term investments prior to year 2013.It had the following transactions involving short-term investmentsin available-for-sale securities during 2013.

Apr. 16 Purchased 4,000 shares of Gem Co. stock at $25.75 pershare plus a $400 brokerage fee.

May 1 Paid $160,000 to buy 90-day U.S. Treasury bills (debtsecurities): $160,000 principal amount, 5% interest, securitiesdated May 1.

July 7 Purchased 2,000 shares of PepsiCo stock at $49.00 pershare plus a $370 brokerage fee.

July 20 Purchased 1,000 shares of Xerox stock at $15.00 pershare plus a $450 brokerage fee.

Aug. 3 Received a check for principal and accrued interest onthe U.S. Treasury bills that matured on July 29.

Aug.15 Received an $0.95 per share cash dividend on the Gem Co.stock.

Aug. 28 Sold 2,000 shares of Gem Co. stock at $32.50 per shareless a $490 brokerage fee.

Oct. 1 Received a $2.00 per share cash dividend on the PepsiCoshares.

Dec. 15 Received a $1.10 per share cash dividend on theremaining Gem Co. shares.

Dec. 31 Received a $1.20 per share cash dividend on the PepsiCoshares.

1. Prepare journal entries to record the preceding transactionsand events.

2. Prepare a table to compare the year-end cost and fair valuesof Perry’s short-term investments in available-for-sale securities.The year-end fair values per share are: Gem Co., $28.00; PepsiCo,$46.25; and Xerox, $12.00.

3. Prepare an adjusting entry, if necessary, to record theyear-end fair value adjustment for the portfolio of short-terminvestments in available-for-sale securities.

Prepare journal entries to record the following transactionsinvolving both the short-term and long-term investments of SophiaCorp., all of which occurred during calendar year 2011. Use theaccount Short-Term Investments for any transactions that youdetermine are short term.





a.

On February 15, paid $150,000 cash to purchase American General's120-day short-term notes at par, which are dated February 15 andpay 10% interest (classified as held-to-maturity).



b.

On March 22, bought 700 shares of Frain Industries common stock at$25 cash per share plus a $250 brokerage fee (classified aslong-term available-for-sale securities).



c.

On May 15, received a check from American General in payment of theprincipal and 120 days' interest on the notes purchased intransaction a.



d.

On July 30, paid $50,000 cash to purchase MP3 Electronics' 8% notesat par, dated July 30, 2011, and maturing on January 30, 2012(classified as trading securities).



e.

On September 1, received a $0.50 per share cash dividend on theFrain Industries common stock purchased in transactionb.



f.

On October 8, sold 350 shares of Frain Industries common stock for$32 cash per share, less a $175 brokerage fee.



g.

On October 30, received a check from MP3 Electronics for threemonths' interest on the notes purchased in transactiond.

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, 2016. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Record these transactions on page 10:

2016
Jan. 18 Purchased 9,000 shares of Malmo Inc. as an available-for-sale investment at $40 per share, including the brokerage commission.
July 22 A cash dividend of $3.00 per share was received on the Malmo stock.
Oct. 5 Sold 500 shares of Malmo Inc. stock at $58.00 per share, less a brokerage commission of $100.
Dec. 18 Received a regular cash dividend of $3.00 per share on Malmo Inc. stock.
31 Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $36.00 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.

Record these transactions on page 11:

2017
Jan. 25 Purchased an influential interest in Helsi Co. for $800,000 by purchasing 75,000 shares directly from the estate of the founder of Helsi. There are 250,000 shares of Helsi Co. stock outstanding.
July 16 Received a cash dividend of $3.00 per share on Malmo Inc. stock.
Dec. 16 Received a cash dividend of $3.00 per share plus an extra dividend of $0.20 per share on Malmo Inc. stock.
31 Received $38,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $170,000 in 2017. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
31 Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $44 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $36 to $44 per share.
Required:
A. Journalize the entries to record the preceding transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries.
B. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, 2017, assuming the Retained Earnings balance on December 31, 2017, is $700,000. Refer to the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. For those boxes in which you must enter subtractive or negative numbers use a minus sign.
CHART OF ACCOUNTS
Glacier Products Inc.
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
121 Allowance for Doubtful Accounts
131 Notes Receivable
132 Interest Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
161 Investments-Malmo Inc.
163 Investment in Helsi Co. Stock
165 Valuation Allowance for Trading Investments
166 Valuation Allowance for Available-for-Sale Investments
181 Land
191 Store Equipment
192 Accumulated Depreciation-Store Equipment
193 Office Equipment
194 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
231 Interest Payable
241 Salaries Payable
251 Sales Tax Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Treasury Stock
332 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
350 Unrealized Gain (Loss) on Available-for-Sale Investments
351 Cash Dividends
352 Stock Dividends
390 Income Summary
REVENUE
410 Sales
611 Interest Revenue
612 Dividend Revenue
621 Income of Helsi Co.
631 Gain on Sale of Investments
641 Unrealized Gain on Trading Investments
EXPENSES
511 Cost of Merchandise Sold
512 Bad Debt Expense
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Repairs Expense
534 Selling Expenses
535 Rent Expense
536 Insurance Expense
537 Office Supplies Expense
538 Store Supplies Expense
561 Depreciation Expense-Store Equipment
562 Depreciation Expense-Office Equipment
590 Miscellaneous Expense
710 Interest Expense
721 Loss of Helsi Co.
731 Loss on Sale of Investments
741 Unrealized Loss on Trading Investments

Amount Descriptions
Available-for-sale investments (at cost)
Available-for-sale investments (at fair value)
Net income
Net loss
Other comprehensive income (loss)
Other income (loss)
Trading investments (at cost)
Trading investments (at fair value)

Journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries.

PAGE 10PAGE 11

JOURNAL

DATE DESCRIPTION POST. REF. DEBIT CREDIT

1

2

3

4

5

6

7

8

9

10

11

Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, 2017, assuming the Retained Earnings balance on December 31, 2017, is $700,000. Refer to the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. For those boxes in which you must enter subtractive or negative numbers use a minus sign.

GLACIER PRODUCTS, INC.

Balance Sheet (selected items)

December 31, 2017

1

Current assets:

2

3

4

5

6

Investments:

7

8

9

Stockholders’ equity:

10

11

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