COLTON MFG CO. INC.

At December 31, 2014, Colton owned the following investments in common stock of publically owned companies:

COST MARKET

Wolfe Computer, Inc. (5,000 shares: cost $50, market, $65) $250,000 325,000

Quality Foods (4,000 shares: cost $80, market, $75) $320,000 300,000

$570,000 625,000

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In 2015, Colton engaged in the following transactions:

April 5. Sold 1,000 shares of its investment in Wolfe Computer at a price of $66 per share, less $200 broker fee.

August 7. Sold 2,000 shares of Quality Foods stock for $72 per share, less broker fee of $300.

At December 31, 2015, the market values of these stocks were: Wolfe, $60 per share; Quality, $70.

Instructions:

a.What is the adjusting entry on December 31, 2014 for mark to market?

b. Prepare the entries for April 5 and August 7, 2015

c. Prepare a schedule showing the cost and market values of the stocks/securities owned at the end of 2015.

d. What is the adjusting entry for mark to market on December 31, 2015?

e. How much realized gain/loss will show on the companies Income Statement from these stocks in 2015?