Question: Venice Enterprises, which began operations in 2011, invests in long-term available-for-sale securities. Following is a series of transactions and events involving its long-term investment activity. 2011 Mar. 10 Purchased 2,400 shares of Apple at $33.25 per share plus $1,995 commission. Apr. 7 Purchased 5,000 shares of Ford at $17.50 per share plus $2,625 commission. Sept. 1 Purchased 1,200 shares of Polaroid at $49.00 per share plus $1,176 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Apple, $35.50; Ford, $17.00; Polaroid, $51.75. 2012 Apr. 26 Sold 5,000 shares of Ford at $16.38 per share less a $2,237 commission. June 2 Purchased 3,600 shares of Duracell at $18.88 per share plus a $2,312 commission. June 14 Purchased 900 shares of Sears at $24.50 per share plus a $541 commission. Nov. 27 Sold 1,200 shares of Polaroid at $52 per share less a $1,672 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Apple, $35.50; Duracell, $18.00; Sears, $26.00. 2013 Jan. 28 Purchased 2,000 shares of Coca-Cola Co. at $41 per share plus a $3,280 commission. Aug. 22 Sold 2,400 shares of Apple at $29.75 per share less a $2,339 commission. Sept. 3 Purchased 1,500 shares of Motorola at $29 per share plus a $870 commission. Oct. 9 Sold 900 shares of Sears at $27.50 per share less a $619 commission. Oct. 31 Sold 3,600 shares of Duracell at $16.00 per share less a $1,496 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Coca-Cola, $46.00; Motorola, $22.00.
Required: 1. Prepare journal entries to record these transactions and events and any year-end fair value adjustments to the portfolio of long-term available-for-sale securities.
2. Prepare a table that summarizes the
(a) total cost,
(b) total fair value adjustment, and
(c) total fair value for the portfolio of long-term available-for-sale securities at each year-end.
3. Prepare a table that summarizes
(a) the realized gains and losses and
(b) the unrealized gains or losses for the portfolio of long-term available-for-sale securities at each year-end.