Accounting: Exercise 15-1A -Protom Company

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Protom Company, which began operations in 2009, invests its idle cash in trading securities.  The following transactions are from its short-term investments in its trading securities.

2009

Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share plus a $120 commission.

Feb.  9 Purchased 2,600 shares of Lucent at $39 per share plus a $578 commission.

Oct. 12 Purchased 800 shares of Z-Seven at $7.50 per share plus a $200 commission.

2010

Apr. 15 Sold 800 shares of Ford Motor Co. at $30 per share less a $300 commission.

July  5 Sold 800 shares of Z-Seven at $11 per share less a $103 commission

July. 22 Purchased 2,000 shares of Hunt Corp. at $39 per share plus a $444 commission.

Aug. 19 Purchased 1,600 shares of Donna Karan at $19.50 per share plus a $290 commission.

2011

Feb. 27 Purchased 3,500 shares of HCA at $31 per share plus a $420 commission

Mar.  3 Sold 2,000 shares of Hunt at $35 per share less a $250 commission.

June 21 Sold 2,600 shares of Lucent at $36.75 per share less a $420 commission.

June 30 Purchased 1,300 shares of Black & Decker at $47.50 per share plus a $595 commission.

Nov   1 Sold 1,600 shares of Donna Karan at $19.50 per share less a $309 commission.

Required

1.  Prepare Journal entries to record these short-term investment activities for the years shown. (Ignore any year-end adjusting entries)

2.  On December 31, 2011, prepare the adjusting entry to record any necessary market adjustment for the portfolio of trading securities when HCA’s share price is $33 and Black & Decker’s share price is $43.50.  (Assume the Market Adjustment-Trading account had an unadjusted balance of zero.)