E17-7 (Trading Securities Entries) On December 21, 2006, Bucky Katt
Company provided you with
the following information regarding its trading securities.
December 31, 2006
Investments (Trading) Cost
Fair Value Unrealized Gain (Loss)
Clemson Corp. stock $20,000
$19,000 $(1,000)
Colorado Co. stock 10,000
9,000 (1,000)
Buffaloes Co. stock 20,000
20,600 600
Total of portfolio $50,000
$48,600 (1,400)
Previous securities fair value adjustment balance
–0–
Securities fair value adjustment—Cr.
$(1,400)
During 2007, Colorado Company stock was sold for $9,400. The fair value
of the stock on December 31,
2007, was: Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500.
(a) Prepare the adjusting journal entry needed on December 31, 2006.
(b) Prepare the journal entry to record the sale of the Colorado Company
stock during 2007.
(c) Prepare the adjusting journal entry needed on December 31, 2007.
Business Homework Solutions
#124500
Adjusting Journal Entries - Trading Securities
E17-7 (Trading Securities Entries) On December 21, 2006, Bucky Katt Company provided you with the following information regarding its trading securities.
December 31, 2006
Investments (Trading) Cost Fair Value Unrealized Gain (Loss)
Clemson Corp. stock $20,000 $19,000 $(1,000)
Colorado Co. stock 10,000 9,000 (1,000)
Buffaloes Co. stock 20,000 20,600 600
Total of portfolio $50,000 $48,600 (1,400)
Previous securities fair value adjustment balance -0-
Securities fair value adjustment-Cr. $(1,400)
During 2007, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31,
2007, was: Clemson Corp. stock-$19,100; Buffaloes Co. stock-$20,500.
(a) Prepare the adjusting journal entry needed on December 31, 2006.
(b) Prepare the journal entry to record the sale of the Colorado Company stock during 2007.
(c) Prepare the adjusting journal entry needed on December 31, 2007.
The solution presents the three journal entries required to adjust the balance sheet for proper presentation. The explanation for each journal entry explain the purpose for the entry.
What is this?
By OTA - Overall OTA Rating
Pat Mitchell, CPA - 4.9/5
Purchase Cost Now
$4.19 CAD (was ~$3.99)
Included in Download
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- 124500.xls
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