Question

Stock Investment Transactions, Trading Securities 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: Year 1 Feb. 14. Purchased 3,200 shares of Apollo Inc. as a trading security at $36 per share plus a brokerage commission of $640. Apr. 1. Purchased 1,500 shares of Ares Inc. as a trading security at $14 per share plus a brokerage commission of $300. June 1. Sold 800 shares of Apollo Inc. for $37 per share less an $100 brokerage commission June 27. Dec. 31. Received an annual dividend of $0.14 per share on Apollo Inc. stock. The portfolio of lading securities was adjusted to fair values of $40 and $15 per share for Apollo Inc. and Ares Inc., respectively. Year 2 Mar. 14. Purchased 1,400 shares of Athena Inc. as a trading security at $42 per share plus a $210 brokerage commission June 26. Received an annual dividend of $0.17 per share on Apollo Inc. stock. July 30. Sold 300 shares of Athena Inc. for $36 per share less a $90 brokerage commission Dec. 31. The portfolio of trading securities had a cost of $154,545 and a fair value of $150,400, requiring a credit balance in Valuation Allowance for Trading Investments of $4,145 ($154,545 - $150,400). Thus, the debit balance from December 31, Year 1 is to be adjusted to the new balance. Required:

Answer 1

JoGrnal entries for year1 is as follocws: pebit@) coeditco) pate Acoynt Feb14 Investment în Apollo Inc U5840 Tocash. (3200sharesx $36)+B 640 1U5840 21300 April 1 Investment in Ares INC. TO cash (i500 shas)X$14) +$300 21300 29,500 June1 Cash 540 Gain on sodect Investnelt Inyest oment mApollo INC (g0oshares X B 37)-$100) -(9115,840/3200 Shenes) X800shny E (29,500-2896) =$540 28,960. June27 cash (32005hara-800srames) X $0.14 336 To'Dividend Inceme 336 Dee. 31 Allowana fer Inyestment i 10,320 To engealsed gainon. inyestment (2400mareeX$40+1500shane x15)-186880+21300 ($96000+$22500)-(108180) 19,320

Jonna enbne for yeer 2 is a folows: Date A ccognt machl4 Investment in A thene INC 59010. 59010 Tocash (1400 shore x$42)48210 Junc26cash (2400shaux$o.17) To Dividend Income 408 408 10,710 1.935 July 30 cash ( telossonsau ot Investmeket TOInvestascht in Atbera INC (3005hrex36)- 9 0) – (sg010/1400shong)x 300shone) $10710-(12,645) = $ -1935 12645 pe. 31 Onrealised doss an Ihyestoot 144 65 To alowana for Inyestmant CtHehoX (S10320+4145)

2) Zeus Ihvestment IncC. Ralance sheet ( selected, tems) December 31, year 2 Current Assets: Ihvestment (Trading) Less Allowance for Investment Investment at feir yalue 154,545 4145 క్రొర, 400 3) omrealised d gains e losses oe reported in 8105ses ore repostid in the Incomestatment ot as. othe Inceme (losses