Exercise 17-7 On December 21, 2013, Bucky Katt Company provided you with the fol
ID: 2475505 • Letter: E
Question
Exercise 17-7
On December 21, 2013, Bucky Katt Company provided you with the following information regarding its trading securities.
December 31, 2013
Investments (Trading)
Cost
Fair Value
Unrealized Gain (Loss)
During 2014, Colorado Company stock was sold for $13,580. The fair value of the stock on December 31, 2014, was Clemson Corp. stock—$20,280; Buffaloes Co. stock—$21,250.
(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.)
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
December 31, 2013
Investments (Trading)
Cost
Fair Value
Unrealized Gain (Loss)
Clemson Corp. stock $20,890 $19,890 $(1,000 ) Colorado Co. stock 13,970 12,970 (1,000 ) Buffaloes Co. stock 20,890 21,440 550 Total of portfolio $55,750 $54,300 (1,450 ) Previous fair value adjustment balance 0 Fair value adjustment—Cr. $(1,450 )Explanation / Answer
(a)
Adjusting journal entry needed on December 31, 2013:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
Dec. 31, 2013
Investment in Buffaloes Co. stock
$ 550
Unrealized Gain (Loss) on investment
$ 1,450
Investment in Clemson Corp. stock
$ 1,000
Investment in Colorado Co. stock
$ 1,000
(Being investments valued at fair value)
(b)
Journal entry to record the sale of the Colorado Company stock during 2014:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
2014
Cash
$ 13,580
Gain on sale of investment
$ 610
Investment in Colorado Co. stock
$ 12,970
(Being investment sold)
(c)
Adjusting journal entry needed on December 31, 2014:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
Dec. 31, 2013
Investment in Clemson Corp. stock (20280 - 19890)
$ 390
Investment in Buffaloes Co. stock (21440- 21250)
$ 190
Unrealized Gain (Loss) on investment (390-190)
$ 200
(Being investments valued at fair value)
(a)
Adjusting journal entry needed on December 31, 2013:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
Dec. 31, 2013
Investment in Buffaloes Co. stock
$ 550
Unrealized Gain (Loss) on investment
$ 1,450
Investment in Clemson Corp. stock
$ 1,000
Investment in Colorado Co. stock
$ 1,000
(Being investments valued at fair value)
(b)
Journal entry to record the sale of the Colorado Company stock during 2014:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
2014
Cash
$ 13,580
Gain on sale of investment
$ 610
Investment in Colorado Co. stock
$ 12,970
(Being investment sold)
(c)
Adjusting journal entry needed on December 31, 2014:
Journal Entries:
Date
Accounts/ Explanations
Debit
Credit
Dec. 31, 2013
Investment in Clemson Corp. stock (20280 - 19890)
$ 390
Investment in Buffaloes Co. stock (21440- 21250)
$ 190
Unrealized Gain (Loss) on investment (390-190)
$ 200
(Being investments valued at fair value)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.