Ch 12 - graded HW value 10.00 points American Surety and Fidelity buys and sells
ID: 2459988 • Letter: C
Question
Ch 12 - graded HW value 10.00 points American Surety and Fidelity buys and sells securities expecting to earm profits on short- term diterences in price. For the first 11 months of 2016, gains from selling trading securities totaled $5 million, losses were $9 million, and the company had earned $5 million in investment revenue. The following selected transactions relate to American's trading account during December 2016, and the first week of 2017. The company's fiscal year ends on December 31.No trading secunitie 2016 s were held by American on December 1, 2016 12 Purchased FF&G; Corporation bonds for $18 million. 13 Purchased 2 million Ferry Interoommunications common shares for $34 million. 15 Sold the FF&G; Corporation bonds for $18.6 million 22 Purchased U.S. Treasury bills for $60 million and Treasury bonds for $71 million. 23 Sold hait the Ferry interdommunications common shares for $13 million. 26 Sold the U.S. Treasury bills for $66 million 27 Sold the Treasury bonds for $85 million. Received cash dividends of $200,000 from the Ferry Interoommunications 28 common shares 31 Recorded any Investments. The market price of the Ferry Intercommunications stock was $13 per share. 2017 Jan. 2 Sold the remaining Ferry Intercommunications common shares for $13.1 million. 5 Purchased Warehouse Designs Corporation bonds for $40 milion. Required 1. Prepare the appropriate journal entry for each transaction or event during 2016. (i no jounal entry for each transaction or event during 2016.(f no entry is required first account field. Enter your answers in millions rounded to 1 decimal place. (i.e, 5,500,000 should be entered as 5.5)) for a transaction/event, select "No journal entry required" in the view transaction list view general journal 2016 Investment in FF&G; Corporation bonds Cash 18.0 investment in Fery common shares 32.0 2010 32.0 18.6 2016 Cash vestment in FF&G; Corporation bonds FF&G; C Decembar 22, Inwestment in U.S treasury bils Investment in U.S treasury bonds 70.0 2016Cash 13.0 n Ferry common sharesExplanation / Answer
Correct entries Amt $ Million Date Account Title Dr $ Cr $ Dec 13..2016. Investment -Ferry Intercomm Shares 34 Cash 34 Dec 22.2016. Investment US treasury Bill 60 Investment in US Treasury Bond 71 Cash 131 Dec 23.2016. Cash 13 Investment -Ferry Intercomm Shares 17 Loss On sale of Trading Security 4 Dec 31.2016. Valuation Allowance -Investment in Trading Security 4 Unrealized Gain/(Loss) on Holding Trading Security-I/S 4 Balance Sheet Prsenetation Amt $ Investment -Ferry Intercomm Shares 17 Valuation Allowance -Investment in Trading Security (4) Fair Value of Invetsment -Ferry Intercomm 13 Income statement Amt $ Dividend Income 0.20 Loss On Sale Of Trading Security (10.00) Gain of Sale of Trading Security 6.60 Unrealized Gain/(Loss) on Holding Trading Security-I/S (4) Entries 2017 Date Account Title Dr $ Cr $ Jan 2.2017. Investment -Ferry Intercomm Shares 17 Cash 13 Loss on Sale of Trading Security 4 Jan 5.2017. Invetsment in Bonds-Warehouse designs 40 Cash 40