w sp ri ng Corp n an dium sind cop ation pedal ang n quarrying ston. or bu dino

Question

w sp ri ng Corp n an dium sind cop ation pedal ang n quarrying ston. or bu dino co struction. The company has long dominated the market, at one time achieving a 70% AMough tho rm orre ty owns 2% of the otsa ding common stock of Norton Industries, whisp ing does not have s gnificant inflie ce o er the operations of Norton Cheryl Thomas has recently joined Whispering as assistant controller, and her first assignment is to prepare the 2017 year-end ket l supelier, Norton Industries. accounts securities related to Delaney Motors and Patrick Electric. During 2017, Whispering purchased 97,000 shares of Delaney Motors for $1,341 these n Apr that currentl y has a value of $750,000. Prior to 2017, Whispering invested $22,501,000 in Norton S 21,462,000 on December 31, 2016, whispering, 12% ownership of Norton 2. Industries has a current fair value of S22,396,000 on December 2017

Explanation / Answer

Journal Entry S. No Account Title &Explantation Debit Credit At the time of Purchasing Delaney Motor Shares Share in Delaney Motors $1,341,000 Cash $1,341,000 To Record Purchase of 97000 Share At the time of Market Value increase Securities Fair Avlue Adjustment $247,000 Unrealized Holding Gain (Loss) $247,000 Tot record increas ein Fair Value $1588000-1341000) At the time of Purchasing Patrick Shares Shares in Patrick $1,210,000 Cash $1,210,000 To Record Purchase 55000 Share@ $22 At the time of Market Value decrease Unrealized Holding Gain (Loss) $460,000 Securities Fair Avlue Adjustment $460,000 To record deccrease in Fair Value ($1210000-$750000) At the time of Purchasing Norton Industries Shares Share in Norton Industries $22,501,000 Cash $22,501,000 At the time of Market Value deccrease Unrealized Holding Gain (Loss) $105,000 Securities Fair Avlue Adjustment $105,000 To record deccrease in Fair Value ($22501000-$22396000)

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