Brokerage Fees Of NJK And Sek Common Stock

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Register to read the introduction… Sept. 1
Received $2 per share cash dividend on the SEK common stock.
Oct. 1
Received the semiannual interest on the CRT bonds.
Oct. 1
Sold the CRT bonds for $77,000 less $1,300 brokerage fees.
The fair values of the NJK and SEK common stocks were at $39 and $30 in every corresponding share at December 31.
(a) Journalize the transactions and post to the accounts Debt Investments and Stock
Investments. (Use the T account form.)
(b) Prepare the adjusting entry at December 31, 2012, to report the investments at fair value. All securities are considered to be trading securities.
(c) Show the balance sheet presentation of investment securities at
December 31, 2012
(d) Identify the income statement accounts and give the statement classification of each account. GENERAL JOURNAL
Date Account Titles and Explanation Debit Credit
Stock Investments 51600 Cash 51600
(To record purchase of 1200 shares of NJF common stock)

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After the transaction, the receipt is kept by the vendor and the purchasing agent lists the payment in the cash disbursements journal. The treasurer pays the remaining charges after the verification by the administrators. After the payment, the treasurer seals all transactions with “paid”, sorts them according to payment date and lists the check in the cash disbursements journal. The Reyes Company retains one checking account that is reconciled through the treasurer.
(a)List the weaknesses in internal control over cash disbursements.
1.No prenumbered checks.
2.Checks are kept in unlocked cabinet
3.No segregation of duties
(b) Identify improvements for correcting these weaknesses.
1. Order prenumbered checks.
2. Lock disbursements and keep in separate area from others
3. Segregate approvers, buyers, signers, treasury, account reconcilers.
4. Filing improvements
5. More than one signer needed for checks.

At January 31, Tasha Orin is not capable to adjust the bank balance. Tasha’s reconciliation is the following:
Cash balance per bank
Add: NSF check
Less: Bank service charge
Adjusted balance per

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