Help with Serial Problem Thank You While reviewing the March

Help with Serial Problem

Thank You

While reviewing the March 31, 2014, balance sheet of Success Systems, Adria Lopez notes that the business has built a large cash balance of $77,845. Its most recent bank money market statement shows that the funds are earning an annualized return of 0.75%. Adria Lopez decides to make several investments with the desire to earn a higher return on the idle cash balance. Accordingly, in April 2014, Success Systems makes the following investments in trading securities: On June 30, 2014, the per share market price (fair value) of the Johnson & Johnson shares is $55 and the Starbucks shares is $19. Prepare journal entries to record the April purchases of trading securities by Success Systems. On June 30, 2014, prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.

Solution

Date

Account Title and Explanations

Debit ($)

Credit ($)

April 16, 2014

Trading Securities

Cash

20,300

20,300

April 30, 2014

Trading Securities

Cash

4,650

4,650

June 30, 2014

Trading securities

Unrealized gain (Loss) on trading securities

1,700

1,700

June 30, 2014

Unrealized gain(loss) on trading securities

Trading securities

850

850

Date	Account Title and Explanations	Debit ($)	Credit ($)
April 16, 2014	Trading Securities Cash	20,300	20,300
April 30, 2014	Trading Securities Cash	4,650	4,650
June 30, 2014	Trading securities Unrealized gain (Loss) on trading securities	1,700	1,700
June 30, 2014	Unrealized gain(loss) on trading securities Trading securities	850	850