Exercises - Ch. 17.docx - Exercise 17-6 Your answer is...

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Exercise 17-6Your answer is correct.The following information is available for Barkley Company at December 31, 2017, regarding itsinvestments.SecuritiesCostFair Value3,000 shares of Myers Corporation CommonStock$40,000$48,0001,000 shares of Cole Incorporated Preferred Stock25,00022,000$65,000$70,000(a)Prepare the adjusting entry (if any) for 2017, assuming no balance in the Fair Value Adjustmentaccount at January 1, 2017. Neither of Barkley’s investments result in significant influence. Assumethe securities as trading securities.(Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required, select "No Entry" forthe account titles and enter 0 for the amounts.)
*Exercise 17-7Your answer is correct.On December 21, 2017, Bucky Katt Company provided you with the following information regardingits equity investments.December 31, 2017Investments (Trading)CostFair ValueUnrealized Gain (Loss)Clemson Corp. stock$20,000$19,000$(1,000 )Colorado Co. stock10,0009,000(1,000 )Buffaloes Co. stock20,00020,600600Total of portfolio$50,000$48,600(1,400 )Previous fair value adjustmentbalance0Fair value adjustment—Cr.$(1,400 )During 2018, Colorado Company stock was sold for $9,400. The fair value of the stock on December31, 2018, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500. None of the equityinvestments result in significant influence.
(a)Prepare the adjusting journal entry needed on December 31, 2017.(b)Prepare the journal entry to record the sale of the Colorado Co. stock during 2018.(c)Prepare the adjusting journal entry needed on December 31, 2018.(Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter0 for the amounts.)No.Account Titles and ExplanationDebitCredit(a)Unrealized Holding Gain or Loss - Income1400Fair Value Adjustment1400(b)Cash9400Loss on Sale of Investments600Equity Investments10000(c)Fair Value Adjustment1000Unrealized Holding Gain or Loss - Income1000Exercise 17-11Aranda Corporation made the following cash purchases of securities during 2017, which is the first

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Term
Fall
Professor
Arno Forst
Tags
Accounting, Generally Accepted Accounting Principles, account titles

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