Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016. Cost Fair Value Investment in Readfield Company common

Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016.

Cost Fair Value

Investment in Readfield Company common stock $125,000 $115,500

Investment in Lee Company common stock $100,000 $ 80,000

Investment in Stern Company common stock $250,000 $300,000

Investment in Jones Company common stock $180,000 $190,000

$655,000 $685,500

These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments.

During the year 2017, Lee Companys stock was sold for $102,000. Jamison purchased common stock of Earnhart Company at a cost of $163,000.

At the end of December 2017, the fair values of the trading securities are as follows:

Readfields common stock- $111,800, Sterns common stock- $310,000, Jones common stock- $171600, and Earnharts common stock- $159,250.

. Prepare journal entry to record the purchase of Earnharts common stock by Jamison, calculate the fair value of the portfolio as of December 31, 2017, and make the adjustment entry for the portfolio at December 31, 2017 to report the fair value of investment in the balance sheet.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Accounting

Authors: Timothy Doupnik, Hector Perera

3rd Edition

978-0078110955, 0078110955

More Books

Students also viewed these Accounting questions

Question

What internal and external forces were influencing DigiTech?

Answered: 1 week ago