December 31 Year t is to be adjusted to the new balance 1242

December 31, Year t is to be adjusted to the new balance. 1/24/2018

Solution

1.

2.

3. Unrealized gains or losses are reported in the Income Statement, often as Other Income (Losses).

Date	Description	Debit	Credit
Year 1
Feb. 14	Trading Investments (Apollo Inc.)	96400
	Cash [(2400 x $40) + $400]		96400
Apr. 1	Trading Investments (Ares Inc.)	19440
	Cash [(1200 x $16) + $240]		19440
Jun. 1	Cash [(600 x $41) - $80]	24520
	Gain on sale of investment		420
	Trading Investments (Apollo Inc.)		24100
	($96400 x 600/2400)
Jun. 27	Cash [(2400 - 600) x $0.11]	198
	Dividend revenue		198
Dec. 31	Valuation allowance for trading investments	7860
	Unrealized gain on trading investments		7860
	[(1800 x $44)-($96400-$24100)] + [(1200 x $17)-$19440]
Year 2
Mar. 14	Trading Investments (Athena Inc.)	51865
	Cash [(1100 x $47) + $165]		51865
Jun. 26	Cash (1800 x $0.14)	252
	Dividend revenue		252
Jul. 30	Cash [(200 x $41) - $60]	8140
	Loss on sale of investment	1290
	Trading Investments (Athena Inc.)		9430
	($51865 x 200/1100)
Dec. 31	Unrealized loss on trading investments	11595
	Valuation allowance for trading investments ($7860 + $3735)		11595