You have received your investment portfolio year-end statement from your broker, Rich Waldman. All investments were purchased at the January prices and held the entire year. Portfolio Year-End Statement Investment Number Dividend Price—Jan. 1 Price—Dec. 31 FernRod Corp. 400 shares $.30 $38.38 $45.75 Crown Realty, Inc. 500 shares 0 $74.50 $70.13 Sterling Mines 200 shares $.24 $27.88 $29.25 SJB Enterprises 300 shares $3.00 $68.75 $64.63 GTech 7.125% 16 20 bonds $98.50 $101.38 Comet 9.875% 17 10 bonds $103.88 $100.75 Calculate how much profit or loss you made for the year, including stock dividends and bond interest. What was the total return on investment for your portfolio? Using a broker’s commission of 3% buying and 3% selling on the stocks and $5 buying and $5 selling per bond, how much profit or loss would you make if you liquidated your entire portfolio at the December 31 prices? What would be the return on investment?

You have received your investment portfolio year-end statement from your broker, Rich Waldman. All investments were purchased at the January prices and held the entire year. Portfolio Year-End Statement Investment Number Dividend Price—Jan. 1 Price—Dec. 31 FernRod Corp. 400 shares $.30 $38.38 $45.75 Crown Realty, Inc. 500 shares 0 $74.50 $70.13 Sterling Mines 200 shares $.24 $27.88 $29.25 SJB Enterprises 300 shares $3.00 $68.75 $64.63 GTech 7.125% 16 20 bonds $98.50 $101.38 Comet 9.875% 17 10 bonds $103.88 $100.75 Calculate how much profit or loss you made for the year, including stock dividends and bond interest. What was the total return on investment for your portfolio? Using a broker’s commission of 3% buying and 3% selling on the stocks and $5 buying and $5 selling per bond, how much profit or loss would you make if you liquidated your entire portfolio at the December 31 prices? What would be the return on investment?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 7LTAI

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Otto Corporation has the following trading portfolio of stock investments on December 31, 20XX. Security A; Cost is $17,000 and Fair Value is $16,000; Security B; Cost is $22,000 and Fair Value is $26,000; Security C; Cost is $34,000 and Fair Value is $29,000. Instructions: prepare the adjusting entry for Otto Corporation on December 31, 20XX to report the portfolio at fair value.
Fair Value Journal Entries, Trading Investments Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: Name Number of Shares Total Cost Total Fair Value Griffin Inc. 1,400 $18,760 $17,630 Luck Company 750 24,600 22,880 Wilson Company 350 10,500 10,710 Total $53,860 $51,220 On May 10, Year 2, Gruden Bancorp Inc. purchased 500 shares of Carroll Inc., at $30 per share plus a $90 brokerage commission. Provide the journal entries to record the following: a. The adjustment of the trading security portfolio to fair value on December 31, Year 1. Year 1, Dec. 31 fill in the blank fc5d10fdb048f9d_2 fill in the blank fc5d10fdb048f9d_4 b. The May 10, Year 2, purchase of Carroll Inc. stock. Year 2, May 10 fill in the blank 1c85c7f3ff9905c_2
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Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: 1 Name Number of Shares Total Cost Total Fair Value 2 Griffin Inc. 1,450.00 $29,000.00 $31,900.00 3 Luck Company 1,300.00 35,100.00 28,600.00 4 Wilson Company 860.00 30,960.00 26,660.00 5 Total $95,060.00 $87,160.00 On May 10, Year 2, Gruden Bancorp Inc. purchased 930 shares of Carroll Inc. at $25 per share plus a $170 brokerage commission. Required: A. Provide the journal entry to record the adjustment of the trading security portfolio to fair value on December 31, Year 1.* B. Provide the journal entry to record the May 10, Year 2, purchase of Carroll Inc. stock.* *Refer to the Chart of Accounts for exact wording of account titles.
Ivanhoe, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $14 each $13,440 Rogers Company 880 shares @ $20 each 17,600 Chance Company 520 shares @ $10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment (7,300 ) Equity investments @ fair value $28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Ivanhoe, Inc. sold 320 shares of Chance Company for $11 per share. 3. On May 15, Ivanhoe, Inc. purchased 100 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $19, and Chance $9. During 2021, the following transactions took place. 5. On February 1, Ivanhoe, Inc. sold the remaining Chance shares for $9 per share. 6. On March 1, Rogers Company paid a $2 per share…

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Portfolio Year-End Statement
Investment	Number	Dividend	Price—Jan. 1	Price—Dec. 31
FernRod Corp.	400 shares	$.30	$38.38	$45.75
Crown Realty, Inc.	500 shares	0	$74.50	$70.13
Sterling Mines	200 shares	$.24	$27.88	$29.25
SJB Enterprises	300 shares	$3.00	$68.75	$64.63
GTech 7.125% 16	20 bonds		$98.50	$101.38
Comet 9.875% 17	10 bonds		$103.88	$100.75