Kenseth Company has the following securities in its portfolio on December 31, 2017. None of these investments
Question:
Kenseth Company has the following securities in its portfolio on December 31, 2017. None of these investments are accounted for under the equity method.
Investments | Cost | Fair Value |
1,500 shares of Gordon, Inc., common | $ 73,500 | $ 69,000 |
5,000 shares of Wallace Corp., common | 180,000 | 175,000 |
400 shares of Martin, Inc., preferred | 60,000 | 61,600 |
$313,500 | $305,600 |
All of the securities were purchased in 2017.
In 2018, Kenseth completed the following securities transactions.
March 1 | Sold the 1,500 shares of Gordon, Inc., common, @ $45 less fees of $1,200 |
April 1 | Bought 700 shares of Earnhart Corp., common, @ $75 plus fees of $1,300 |
Kenseth's portfolio of equity securities appeared as follows on December 31, 2018.
Investments | Cost | Fair Value |
5,000 shares of Wallace Corp., common | $180,000 | $175,000 |
700 shares of Earnhart Corp., common | 53,800 | 50,400 |
400 shares of Martin, Inc., preferred | 60,000 | 58,000 |
$293,800 | $283,400 |
Instructions
Prepare the general journal entries for Kenseth Company for:
(a) The 2017 adjusting entry.
(b) The sale of the Gordon stock.
(c) The purchase of the Earnhart stock.
(d) The 2018 adjusting entry for the portfolio.
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren