Katz buys and sells securities in short-term periods. Thefollowing transactions relate to Katz activity in Dec. of 2014,which has a fiscal year end of Dec. 31. All of the followingsecurities meet the criteria to be classified as trading securitiesand no other trading securities were held by Katz prior to Dec.2014.
Dec. 4: Purchased B Corp. Bonds for $12,000,000
Dec. 7: Purchased two-million shares of MU for $20,000,000
Dec. 10: Sold the B Corp. Bonds for $11,900,000
Dec. 15: Purchased US Treasury Bills for $55,000,000 and USTreasury Bonds for $66,000,000.
Dec. 17: Sold 1,000,000 shares MU for $12,000,000
Dec. 21: Sold US Treasury Bills for $57,000,000
Dec. 23: Sold US Treasury Bonds for $65,000,000
Dec. 27: Received payment of cash dividends from MU commonchares for $250,000.
Dec. 31: Record any adjusting/closing entries relating to theinvestments. Market price of MU was $12 per share.
- Prepare all appropriate journal entries for Dec. 2014
- Calculate the total to be reported on the 2014 balance sheetfor short-term investments.
- Calculate the total impact to profit reported on 2014 incomestatement that is a result of the investment activity.
