Question

The investment manager of 4th National Bank invests some of the bank’s financial resources in equity securities. During the last quarter of 2019, the following transactions occurred in regard to these equity securities:

Transactions:
Nov.	5	Purchased 200 shares of Morgan Company common stock at $86 per share.
	19	Purchased 300 shares of Parker Company preferred stock at $63 per share.
	29	Sold 100 shares of Morgan Company common stock at $89 per share.
Dec.	15	Purchased 400 shares of Tathem Company common stock at $37 per share.
	17	Sold 100 shares of Parker Company preferred stock at $62 per share.

On December 31, 2019, the market values of the shares were as follows: Morgan, $87 per share; Parker, $61 per share; and Tathem, $37.25 per share. The bank held no equity securities at the beginning of the last quarter of 2019.

Required:

1.	Prepare journal entries to record the preceding information.
2.	Show what the bank reports on its fourth quarter 2019 income statement for these equity securities.
3.	Show how the bank reports these equity securities on its December 31, 2019, balance sheet.

1. Prepare journal entries to record the 2019 transactions.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14

2. Show what the bank reports on its fourth quarter 2019 income statement for these equity securities.

Income Statement Instructions

4th National Bank

Partial Income Statement

For the Year Ended December 31, 2019

1
2
3

3. Show how the bank reports these equity securities on its December 31, 2019, balance sheet.

Balance Sheet Instruction

4th National Bank

Partial Balance Sheet

December 31, 2019

1	Current Assets:
2

Answer 1

Answer-1:

Answer-4:

Answer-3: