Problem C-5A Long-term investment transactions; unrealized and realized gains an

Question

Problem C-5A Long-term investment transactions; unrealized and realized gains and losses LO C2, P3, P4 The following information applies to the questions displayed below Stoll Co's long term availiable-for-sale portfolio at December 31, 2014, consists of the following Cost Fair Value $1040,600 40,000 shares of Company A common stock 30,000 shares of Company B common stock $930,000 330,000 340750 5,000 shares of Compeny C common stock 1,364,000 1,314,875 Stoll enters Into the following long-term investment transactions during year 2015 Jan 29 Sold 15,000 shares of Company B common stock for $169,375 less a brokerage fee of $3,500 Apr. 17 Purchased 21,000 shares of Company W common stock for $450,000 plus a brokerage fee of S3.200. The shares represent a 30% ownership in Company w 3,200. The shares represent a 10% ownership in Company X, $8,000 The shares represent a 51% ownership in Company Y $6,000. The shares represent a 5% ownership in Company Sold 40,000 shares of Company A common stock for $1,028000 less a brokerage fee of $4,100 July 6 Purchased 9,000 shares of Company X common stock for $258,625 plus a brokerage fee of es of Company Y common stock for $600,000 plus a brokerage fee of Nov. 13 Purchased 13,000 shares of Compeny Z common stock for $528.300 plus a brokerage fee of Dec 9 The fair values of ts investments at December 31, 2015, are Fair Value B $ 168.250 C $ 1,226,125 W $ 388,000 x 241750 Y $1068,000 Z $ 563,100

Explanation / Answer

Answer 1. Dec 31, 2014 No. of Shares Cost   Fair Value Difference Company A          40,000    1,040,600.00        930,000.00 (110,600.00) Company B          30,000        340,750.00        330,000.00     (10,750.00) Company C          35,000    1,364,000.00    1,314,875.00     (49,125.00) Total    2,745,350.00    2,574,875.00 (170,475.00) Dec 31, 2015 No. of Shares Cost   Fair Value Difference Company B          15,000        170,375.00        168,250.00        (2,125.00) Company C          35,000    1,364,000.00    1,226,125.00 (137,875.00) Company X            9,000        261,825.00        241,750.00     (20,075.00) Company Z          13,000        534,300.00        563,100.00        28,800.00 Total    2,330,500.00    2,199,225.00 (131,275.00) Less - 2016 Unrealises Loss (170,475.00) Net Unrealized Gain        39,200.00 Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec-17 Fair Value Adjustment (AFS - Long Term)    39,200.00    Unrealized Loss Equity    39,200.00 Answer 3. Company B Sale of 15,000 Shares - 169,375 - $3,500       165,875 Cost of 7,000 Shares - $340,750 X (15,000/30,000)       170,375 Gain (Loss) on sale of Shares          (4,500.00) Company A Sale of 40,000 Shares - $1,028,000 - $4,100    1,023,900 Cost of 40,000 Shares    1,040,600 Gain (Loss) on sale of Shares        (16,700.00) Total Gain(Loss) on sale of shares        (21,200.00)

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