D- 4 Test Bank for Financial Accounting, Tenth Edition Problem D -Il Short-term
ID: 2594185 • Letter: D
Question
D- 4 Test Bank for Financial Accounting, Tenth Edition Problem D -Il Short-term Investments (10 points) Nolan journal entries f computations. Company entered into the transactions listed below during 2015. Prepare the appropriate or Nolan Company. You may omit journal entry explanations but you should show Jan. 10 Purchased 500 shares of Scott Company common stock for $35,000 as a short- term investment in equity securities. Apr. Purchased 1,000 shares of Jensen Company common stock for $45 per share as a short-term investment in equity securities. 6 Sept. 20 Sold 400 shares of Jensen Company common stock for $20,400. Dec. 31 Use the following information for year-end adjusting entries: Fair value per share: Scott Company Common Stock-$69 per share. Jensen Company Common Stock-$42 per share. Nolan classifies both investments as trading securities.Explanation / Answer
Journal Entry Date Particulars Dr. Amt. Cr. Amt. 10-Jan Trading Securities - Scott Dr. 35,000.00 To Cash 35,000.00 6-Apr Trading Securities - Jensen Dr. 45,000.00 1,000 Shares X $45 To Cash 45,000.00 20-Sep Cash Dr. 20,400.00 To Trading Securities - Jensen 18,000.00 400 Shares X $45 To Gain on sales of Trading Securities 2,400.00 $20,400 - $18,000 31-Dec Unrealised Loss on Trading Securities Dr. 2,300.00 To Trading Securities 2,300.00 Shares Cost Fair Value per Share Total Fair Value Scott Company 500 35,000 69 34,500 Jensen Company 600 27,000 42 25,200 Total 62,000 59,700 Unrealised Loss 2,300
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