Katz buys and sells securities in short-term periods. The following transactions relate to Katz activity in...

60.1K

Verified Solution

Question

Accounting

Katz buys and sells securities in short-term periods. Thefollowing transactions relate to Katz activity in Dec. of 2014,which has a fiscal year end of Dec. 31. All of the followingsecurities meet the criteria to be classified as trading securitiesand no other trading securities were held by Katz prior to Dec.2014.
Dec. 4: Purchased B Corp. Bonds for $12,000,000
Dec. 7: Purchased two-million shares of MU for $20,000,000
Dec. 10: Sold the B Corp. Bonds for $11,900,000
Dec. 15: Purchased US Treasury Bills for $55,000,000 and USTreasury Bonds for $66,000,000.
Dec. 17: Sold 1,000,000 shares MU for $12,000,000
Dec. 21: Sold US Treasury Bills for $57,000,000
Dec. 23: Sold US Treasury Bonds for $65,000,000
Dec. 27: Received payment of cash dividends from MU commonchares for $250,000.
Dec. 31: Record any adjusting/closing entries relating to theinvestments. Market price of MU was $12 per share.
Prepare all appropriate journal entries for Dec. 2014
Calculate the total to be reported on the 2014 balance sheetfor short-term investments.
Calculate the total impact to profit reported on 2014 incomestatement that is a result of the investment activity.

Answer & Explanation Solved by verified expert

4.4 Ratings (938 Votes)

Ans Journal Entries Date Account Title and Explanation Debit Credit 2014 Dec4 Investment in B Corp Ac Dr 12000000 Cash Ac 12000000 To record the bonds purchased of B Corporation Dec7 Investment in MU 20000000 Cash Ac 20000000 To record the purchased of twomillion shares of PU Dec10 Cash Ac 11900000 Loss on sale of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member