Question
E17.7 (LO 2) (Equity Securities Entries) On December 21, 2020, Bucky Katt Company provided you with the following information regarding its equity investments. December 31,
E17.7 (LO 2) (Equity Securities Entries) On December 21, 2020, Bucky Katt Company provided you with the following information regarding its equity investments.
| December 31, 2020 | ||||||
| Investments | Cost | Fair Value | Unrealized Gain (Loss) | |||
| Clemson Corp. stock | $20,000 | $19,000 | $(1,000) | |||
| Colorado Co. stock | 10,000 | 9,000 | (1,000) | |||
| Buffaloes Co. stock | 20,000 | 20,600 | 600 | |||
| Total of portfolio | $50,000 | $48,600 | (1,400) | |||
| Previous fair value adjustment balance | 0 | |||||
| Fair value adjustmentCr. | $(1,400) | |||||
During 2021, Colorado Co. stock was sold for $9,400. The fair value of the stock on December 31, 2021, was Clemson Corp. stock$19,100; Buffaloes Co. stock$20,500. None of the equity investments result in significant influence.
Instructions
a. Prepare the adjusting journal entry needed on December 31, 2020.
b. Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.
c. Prepare the adjusting journal entry needed on December 31, 2021.
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Financial Accounting And Reporting
Authors: Barry Elliott, Jamie Elliott
19th Edition
1292255994, 9781292255996
