alue 45.00 points Carlsville Company, which began operations in 2015, invests it
ID: 2498072 • Letter: A
Question
alue 45.00 points Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities 2015 Jan. 20 Purchased 900 shares of Ford Motor Co. at $28 per share plus a $130 commission. Feb. 9 Purchased 3,000 shares of Lucent at $38 per share plus a $200 commission. Oct. 12 Purchased 720 shares of Z-Seven at $8.10 per share plus a $90 commission. Dec. 31 Fair value of the short-term investments in trading securities is $150,300 2016 Apr. 15 Sold 900 shares of Ford Motor Co. at $30 per share less a $290 commission. July 5 Sold 720 shares of Z-Seven at $10.75 per share less a $90 commission July 22 Purchased 1,700 shares of Hunt Corp. at $31 per share plus a $225 commission. Aug. 19 Purchased 1,900 shares of Donna Karan at $41.00 per share plus a $105 commission. Dec. 31 Fair value of the short-term investments in trading securities is $241,350 2017 Feb. 27 Purchased 3,900 shares of HCA at $33 per share plus a $410 commission. Mar. 3 Sold 1,700 shares of Hunt at $26 per share less a $130 commission. June 21 Sold 3,000 shares of Lucent at $35.75 per share less a $42 commission June 30 Purchased 1,400 shares of Black & Decker at $47.50 per share plus a $590 commission Nov. 1Sold 1,900 shares of Donna Karan at $41.00 per share less a $124 commission. Dec. 31 Fair value of the short-term investments in trading securities is $200,600 Required Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities. (If no entry is required select No journal entry required in the first entry field. Do not round your intermediate calculations.) view transaction list view general journalExplanation / Answer
Answer:
Prepare journal entries to record these short-term investmentACTIVITIES for the years shown:
2015
Jan. 20 Purchased 900 shares of Ford Motor Co. at $28 per share plus a $130 commission.
Date
Particulars
Debit ($)
Credit ($)
20 jan 2015
Trading securities A/C
Cash A/C
25,330 [(900 x $28) + $130]
25330
Feb. 9 Purchased 3000 shares of Lucent at $38 per share plus a $200 commission.
Date
Particulars
Debit ($)
Credit ($)
9 Feb 2015
Trading securities A/C
Cash A/C
114200 [(3000 x $38) + $200]
114200
Oct 12 Purchased 720 shares of Z-Seven at $8.10 per share plus a $90 commission:
Date
Particulars
Debit ($)
Credit ($)
12 Oct 2015
Trading securities A/C
Cash A/C
5922 [(720 x $8.10) + $90]
5922
2016
Apr 15 Sold 900 shares of Ford Motor Co. at $30 per share less a $290 commission:
Date
Particulars
Debit ($)
Credit ($)
15 Apr 2016
Cash A/C Dr.
Trading securities A/C
Gain on sale of trading securities A/C
26710 [(900 x $30) - $290]
25330
1380 (26710 -25330)
5 july Sold 720 shares of Z-Seven at $10.75 per share less a $90 commission:
Date
Particulars
Debit ($)
Credit ($)
5 July 2016
Cash A/C Dr.
Trading securities A/C
Gain on sale of trading securities A/C
7650 [(720 x $10.75) - $90]
5922
1728 (7650 -5922)
22 July Purchased 1700 shares of Hunt Corp. at $31 per share plus a $225 commission:
Date
Particulars
Debit ($)
Credit ($)
22 July 2016
Trading securities A/C
Cash A/C
52925 [(1700 x $31) + $225]
52925
19 Aug Purchased 1,900 shares of Donna Karan at $41.00 per share plus a $105 commission:
Date
Particulars
Debit ($)
Credit ($)
19 Aug 2016
Trading securities A/C
Cash A/C
78005 [(1900 x$41.00) + $105]
78005
2017
27 Feb Purchased 3,900 shares of HCA at $33 per share plus a $410 commission:
Date
Particulars
Debit ($)
Credit ($)
27 Feb 2017
Trading securities A/C
Cash A/C
129110 [(3900 x$33) + $410]
129110
3 Mar Sold 1700 shares of Hunt at $26 per share less a $130 commission:
Date
Particulars
Debit ($)
Credit ($)
3 Mar 2017
Cash A/C Dr.
Loss on sale of trading securities A/C Dr.
Trading securities A/C
44070 [(1700 x$26) - $130]
8855 (44070 - 52925)
52925
21 June Sold 3000 shares of Lucent at $35.75 per share less a $42 commission:
Date
Particulars
Debit ($)
Credit ($)
21 June 2017
Cash A/C Dr.
Loss on sale of trading securities A/C Dr.
Trading securities A/C
107208 [(3000 x35.75) - $42]
6992 (107208 - 114200)
114200
30 June Purchased 1,400 shares of Black & Decker at $47.50 per share plus a $590 commission.
Date
Particulars
Debit ($)
Credit ($)
30 June 2017
Trading securities A/C Dr.
Cash A/C
67090 [(1400 x47.50) + $590]
67090
1 Nov Sold 1900 shares of Donna Karan at $41.00 per share less a $124 commission:
Date
Particulars
Debit ($)
Credit ($)
1 Nov 2017
Cash A/C Dr.
Loss on sale of trading securities A/C Dr.
Trading securities A/C
77776 [(1900 x41.00) - $124]
229 (78005 -77776)
78005
Record the year-end adjusting entry for the securities portfolio as of December 31, 2015.
Dr Fair Value Adjustment Trading 4848 [(150300 - $145452]
Cr Unrealized gain on trading securities 4848
31 dec 2016
Dr Unrealized loss on trading securities 3780
Cr Fair Value Adjustment Trading 3780 [(245130 - $241350]
31 Dec 2017
Dr Fair Value Adjustment Trading 4400 [(200600 - $196200]
Cr Unrealized gain on trading securities 4400
Date
Particulars
Debit ($)
Credit ($)
20 jan 2015
Trading securities A/C
Cash A/C
25,330 [(900 x $28) + $130]
25330
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