E17-7 - 3 Prepare the adjusting journal entry needed on...

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E17-7 (LO 3) (Trading Securities Entries) On December 21, 2006, Bucky Katt Company provided you with the following information regarding its trading securities. 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. Instructions 1 Prepare the adjusting journal entry needed on December 31, 2006. 2 Prepare the journal entry to record the sale of the Colorado Company stock during 2007.
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Unformatted text preview: 3 Prepare the adjusting journal entry needed on December 31, 2007. SOLUTIONS 1 December 31, 2006 Unrealized Holding Gain or Loss--Income 1,400 Securities Fair Value Adjustment (Trading) 1,400 2 During 2007 Cash 9,400 Loss on Sale of Securities 600 Trading Securities 10,000 3 December 31, 2006 Securities Cost Fair Value Unrealize d Gain (Loss) Clemson Corp. Stock $20,000 $19,100 ($900) Buffaloes Co. 20,000 20,500 500 Stock Total of Portfolio $40,000 $39,600 -400 Previous Securities Fair Value-1,400 adjustment balance Cr. Securities fair value $1,000 adjustment Dr. Securities fair value adjustment (Trading) 1,000 Unrealized Holding Gain or Loss 1,000 Income...
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This note was uploaded on 08/14/2011 for the course ACCT 423 taught by Professor R.becksted during the Spring '09 term at University of Phoenix.

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E17-7 - 3 Prepare the adjusting journal entry needed on...

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