ACCOUNTING
Warren, Reeve and Duchac
Financial Accounting
Managerial Accounting
Carl Warren, James M. Reeve, Jonathan E. Duchac
Chapter 15
PR 15-2A Western Capital Inc. is a regional investment company that began operations on January 1, 2010. The following transactions relate to trading securities acquired by Western Capital Inc., which has a fiscal year ending on December 31:
2010
Feb. 3. Purchased 2,500 shares of Titan Inc. as a trading security at $35 per share plus a brokerage commission of $500.
Mar. 12. Purchased 1,200 shares of Quick Tyme Inc. as a trading security at $14 per share plus a brokerage commission of $240.
May15. Sold 600 shares of Titan Inc. for $36 per share less a $80 brokerage commission.
June 12. Received an annual dividend of $0.12 per share on Titan Inc. stock.
Dec. 31. The portfolio of trading securities was adjusted to fair values of $15 and $39 per share for Quick Tyme Inc. and Titan Inc., respectively.
2011
Apr. 9. Purchased 1,100 shares of Aspire Inc. as a trading security at $41 per share plus a $165 brokerage commission.
June 15. Received an annual dividend of $0.15 per share on Titan Inc. stock.
Aug. 20. Sold 200shares of Aspire Inc.for $35 per share less a $60 brokerage commission.
Dec. 31. The portfolio of trading securities was adjusted to fair value using the following fair values per share for the trading securities:
Aspire Inc. $31
Quick Tyme Inc. 16
Titan Inc. 37
The portfolio of trading securities was adjusted to fair value.
Instructions
1. Journalize the entries to record these transactions.
2. Prepare the investment-related current asset balance sheet disclosures for Western Capital Inc. on December 31,2011.
3. How are unrealized gains or losses on trading investments disclosed on the financial statements of Western Capital Inc.
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