a-Journalize the 2018 transactions and post to the account Stock Investments. (U

Question

a-Journalize the 2018 transactions and post to the account Stock Investments. (Use the T-account form.)

b-Prepare the adjusting entry at December 31, 2018, to show the securities at fair value. The stock should be classified as available-for-sale securities.

c-Show the balance sheet presentation of the investments at December 31, 2018. At this date, Turnball Associates has common stock $1,400,000 and retained earnings $1,000,000.

the info and part a is pictured below

Question 4 On December 31, 2017, Turnball Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Shares Cost Common Stock Gehring Co. Wooderson Co. Kitselton Co 2,190 $70,080 4,890 1,760 39,120 36,960 On December 31, 2017, the total fair value of the securities was equal to its cost. In 2018, the following transactions occurred: Aug. 1 Received $0.50 per share cash dividend on Gehring Co. common stock. Sept. Sold 1,467 shares of Wooderson Co. common stock for cash at $7 per share. Oct. 1 Sold 876 shares of Gehring Co. common stock for cash at $35 per share. Nov. 1 Received $2 per share cash dividend on Kitselton Co. common stock. Dec. 15 Received $0.50 per share cash dividend on Gehring Co. common stock. Dec. 31 Received $2 per share annual cash dividend on Wooderson Co. common stock. At December 31, the fair values per share of the common stocks were: Gehring Co. $34, Wooderson Co. $7, and Kitselton Co. $19 Journalize the 2018 transactions and post to the account Stock Investments. (Use the T-account form.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Explanation / Answer

(a)

Date Account Titles and Explanation Debit Credit Aug. 1 Cash 1095 Dividend revenue (2190 x $0.50) 1095 Sept. 1 Cash (1467 x $7) 10269 Loss on sale of investment 1467 Stock Investments ($39120 x 1467/4890) 11736 Oct. 1 Cash (876 x $35) 30660 Gain on sale of investment 2628 Stock Investments ($70080 x 876/2190) 28032 Nov. 1 Cash 3520 Dividend revenue (1760 x $2) 3520 Dec. 15 Cash 657 Dividend revenue [(2190 - 876) x $0.50] 657 Dec. 31 Cash 6846 Dividend revenue [(4890 - 1467) x $2] 6846

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