Cam Security, which began operations in 2008, invests in long-term available for sale securities. Following is a series of transactions annd events determining its long-term investment activity.
2008
| Feb. 12 | Purchased 1,000 shares of Goodyear Tire at $55.50 per share plus a $850 commission. |
| May 5 | Purchased 500 shares of Quaker State at $23.00 per share plus a $470 commission. |
| Oct. 27 | Purchased 2,300 shares of Ford at $82.50 per share plus a $1,080 commission. |
| Dec. 31 | Per share market values for stocks in the portfolio are Goodyear Tire, $58.00; Quaker State, $14.50; Ford, $71.75. |
2009
| Jan 1 | Sold 500 shares of Quaker State at $18.00 per share less a $550 commission. |
| March 2 | Purchased 850 shares of Duralube at $46.50 per share plus a $365 commission. |
| June 23 | Purchased 3,500 shares of McDonald’s at $66.00 per share plus a $780 commission. |
| Aug. 12 | Sold 850 shares of Duralube at $59.00 per share less a $230 commission. |
| Dec. 31 | Per share market values for stocks in the portfolio are Goodyear, $57.25; McDonalds, $65.00; Ford $75.75 |
2010
| Jan. 6 | Purchased 1,800 shares of Hewlett-Packard at $56.00 per share plus a $620 commission. |
| June 27 | Sold 1,000 shares of Goodyear Tire at $50.00 per share less a $320 commission. |
| July 7 | Purchased 2,000 shares of Harley-Davidson at $26.50 per share plus a $875 commission. |
| Aug. 19 | Sold 2,300 shares of Ford at $62.50 per share less a $850 commission. |
| Nov. 22 | Sold 3,500 shares of McDonald’s at $78.50 per share less a $420 commission. |
| Dec. 31 | Per share market values for stocks in the protfolio are Harley-Davidson, $28.75; Hewlett-Packard, $61.50. |
Required
- Prepare journal entries to record these transactions and events and any year-end adjustments needed to record the market values of the long-term investments.
- Prepare a table that summarizes the (a) total cost, (b) total market adjustment, and (c) total market value of the portfolio of long-term investments at each year-end.
- For each year, prepare a table that shows the (a) realized gains and losses and (b) the total unrealized gains or losses at each year-end.
