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M. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations: Issuing Company Cost Arden Enterprises Inc. $136,080 French Broad Industries
M. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations:
Issuing Company | Cost |
Arden Enterprises Inc. | $136,080 |
French Broad Industries Inc. | 59,400 |
Pisgah Construction Inc. | 96,640 |
$292,120 |
The fair value of the various available-for-sale securities on December 31, 20Y5, was as follows:
Issuing Company | Fair Value, Dec. 31, 20Y5 |
Arden Enterprises Inc. | $170,100 |
French Broad Industries Inc. | 70,200 |
Pisgah Construction Inc. | 90,600 |
$330,900 |
Required:
a. | Journalize the adjusting entry for the fair value of the portfolio of securities on December 31, 20Y5.* |
b. | If the fair value of the portfolio of securities were the same on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
c. | If the fair value of the portfolio of securities was $333,200 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
d. | If the fair value of the portfolio of securities was $324,100 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. If no entry is required, simply skip to the next transaction. |
CHART OF ACCOUNTSM. Jones Inc.General Ledger
ASSETS | |
---|---|
110 | Cash |
111 | Petty Cash |
120 | Accounts Receivable |
121 | Allowance for Doubtful Accounts |
131 | Notes Receivable |
132 | Interest Receivable |
141 | Merchandise Inventory |
145 | Office Supplies |
146 | Store Supplies |
151 | Prepaid Insurance |
161 | Trading Investments |
162 | Available-for-Sale Investments |
165 | Valuation Allowance for Trading Investments |
166 | Valuation Allowance for Available-for-Sale Investments |
181 | Land |
191 | Store Equipment |
192 | Accumulated Depreciation-Store Equipment |
193 | Office Equipment |
194 | Accumulated Depreciation-Office Equipment |
LIABILITIES | |
---|---|
210 | Accounts Payable |
221 | Notes Payable |
231 | Interest Payable |
241 | Salaries Payable |
251 | Sales Tax Payable |
EQUITY | |
---|---|
311 | Common Stock |
312 | Paid-In Capital in Excess of Par-Common Stock |
321 | Preferred Stock |
322 | Paid-In Capital in Excess of Par-Preferred Stock |
331 | Treasury Stock |
332 | Paid-In Capital from Sale of Treasury Stock |
340 | Retained Earnings |
350 | Unrealized Gain on Available-for-Sale Investments |
350.1 | Unrealized Loss on Available-for-Sale Investments |
351 | Cash Dividends |
352 | Stock Dividends |
REVENUE | |
---|---|
410 | Sales |
611 | Interest Revenue |
612 | Dividend Revenue |
631 | Gain on Sale of Investments |
641 | Unrealized Gain on Trading Investments |
EXPENSES | |
---|---|
511 | Cost of Merchandise Sold |
512 | Bad Debt Expense |
515 | Credit Card Expense |
516 | Cash Short and Over |
520 | Salaries Expense |
531 | Advertising Expense |
532 | Delivery Expense |
533 | Repairs Expense |
534 | Selling Expenses |
535 | Rent Expense |
536 | Insurance Expense |
537 | Office Supplies Expense |
538 | Store Supplies Expense |
561 | Depreciation Expense-Store Equipment |
562 | Depreciation Expense-Office Equipment |
590 | Miscellaneous Expense |
710 | Interest Expense |
731 | Loss on Sale of Investments |
741 | Unrealized Loss on Trading Investments |
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