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Scofield Financial Co. is a regional insurance company that began operations on January 1, 2016. The following transactions relate to trading securities acquired by Scofield Financial Co., which has a fiscal year ending on December 31:

Record these transactions on page 10:

2016
Mar.	14	Purchased 4,700 shares of Wilkomm Inc. as a trading security at $36 per share plus a brokerage commission of $470.
Apr.	24	Purchased 1,800 shares of McMarsh Inc. as a trading security at $48 plus a brokerage commission of $198.
Jun.	1	Sold 2,440 shares of Wilkomm Inc. for $34 per share less a $105 brokerage commission.
	30	Received an annual dividend of $0.35 per share on Wilkomm Inc. stock.
Dec.	31	The portfolio of trading securities was adjusted to fair values of $34 and $47 per share for Wilkomm Inc. and McMarsh Inc., respectively.

Record these transactions on page 11:

2017
Apr.	4	Purchased 3,500 shares of Daley Inc. as a trading security at $31 per share plus a $175 brokerage commission.
Jun.	28	Received an annual dividend of $0.40 per share on Wilkomm Inc. stock.
Sep.	9	Sold 700 shares of Daley Inc. for $33 per share less a $55 brokerage commission.
Dec.	31	The portfolio of trading securities had a cost of $255,124 and a fair value of $331,594, requiring a debit balance in Valuation Allowance for Trading Investments of $76,470 ($331,594 -$255,124). Thus, the credit balance from December 31, 2016, is to be adjusted to the new balance.

	Required:
A.	Journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page.
B.	Prepare the investment-related current asset balance sheet presentation for Scofield Financial Co. on December 31, 2017.
C.	How are unrealized gains and losses on trading investments presented in the financial statements? * Refer to the information given and the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. Less or Plus will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Chart of Accounts

CHART OF ACCOUNTS
Scofield Financial Co.
General Ledger
ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 161 Investments-Wilkomm Inc. 162 Investments-McMarsh Inc. 163 Investments-Daley Inc. 165 Valuation Allowance for Trading Investments 166 Valuation Allowance for Available-for-Sale Investments 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 231 Interest Payable 241 Salaries Payable 251 Sales Tax Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Unrealized Gain (Loss) on Available-for-Sale Investments 351 Cash Dividends 352 Stock Dividends 390 Income Summary	REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 631 Gain on Sale of Investments 641 Unrealized Gain on Trading Investments EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 536 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 731 Loss on Sale of Investments 741 Unrealized Loss on Trading Investments

Amount Descriptions

Amount Descriptions
Increase in retained earnings
Net income
Net loss
Other comprehensive income (loss)
Other income (loss)
Retained earnings, December 31, 2017
Retained earnings, January 1, 2017
Trading investments (at cost)
Trading investments (at fair value)

Journal

Journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries. In your computations, round per share amounts to two decimal places.

PAGE 10PAGE 11

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10		Adjusting Entries
11
12

Balance Sheet

Prepare the investment-related current asset balance sheet presentation for Scofield Financial Co. on December 31, 2017. Refer to the information given and the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. Less or Plus will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Scofield Financial Co.

Balance Sheet (selected Current Asset items)

December 31, 2017

1	Current assets:
2
3
4

Final Question

How are unrealized gains and losses on trading investments presented in the financial statements?

Unrealized gains and losses on trading investments are reported on the . For 2016, Scofield Financial Co. would have reported an . For 2017, Scofield Financial Co. would have reported an . If unrealized gains and losses were significant for Scofield Financial, then they would be .

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