Question
On December 21, 2017, Honeywell Company provided you with the following information regarding its equity investments. December 31, 2017 Investments (Trading) Cost Fair Value Unrealized
On December 21, 2017, Honeywell Company provided you with the following information regarding its equity investments.
| December 31, 2017 | |||||||
| Investments (Trading) | Cost | Fair Value | Unrealized Gain (Loss) | ||||
| Clemson Corp. stock | $19,200 | $18,300 | $(900 | ) | |||
| Colorado Co. stock | 9,300 | 8,300 | (1,000 | ) | |||
| Buffaloes Co. stock | 19,200 | 19,790 | 590 | ||||
| Total of portfolio | $47,700 | $46,390 | (1,310 | ) | |||
| Previous fair value adjustment balance | 0 | ||||||
| Fair value adjustmentCr. | $(1,310 | ) | |||||
During 2018, Colorado Company stock was sold for $8,840. The fair value of the stock on December 31, 2018, was Clemson Corp. stock$18,400; Buffaloes Co. stock$19,680. None of the equity investments result in significant influence.
| (a) | Prepare the adjusting journal entry needed on December 31, 2017. | |
| (b) | Prepare the journal entry to record the sale of the Colorado Co. stock during 2018. | |
| (c) | Prepare the adjusting journal entry needed on December 31, 2018. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Survey Of Accounting
Authors: James D. Stice, W. Steve Albrecht, Earl Kay Stice, K. Fred Skousen
1st Edition
0538846178, 978-0538846172
