Question
Problem 15-1A Recording transactions and fair value adjustments for trading securities LO P1 Carlsville Company, which began operations in 2017, invests its idle cash in
Problem 15-1A Recording transactions and fair value adjustments for trading securities LO P1
Carlsville Company, which began operations in 2017, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities. 2017
| Jan. | 20 | Purchased 800 shares of Ford Motor Co. at $27 per share plus a $125 commission. | ||
| Feb. | 9 | Purchased 2,300 shares of Lucent at $37 per share plus a $195 commission. | ||
| Oct. | 12 | Purchased 760 shares of Z-Seven at $7.60 per share plus a $100 commission. | ||
| Dec. | 31 | Fair value of the short-term investments in trading securities is $116,200. |
2018
| Apr. | 15 | Sold 800 shares of Ford Motor Co. at $31 per share less a $295 commission. | ||
| July | 5 | Sold 760 shares of Z-Seven at $11.00 per share less a $95 commission. | ||
| July | 22 | Purchased 2,000 shares of Hunt Corp. at $37 per share plus a $230 commission. | ||
| Aug. | 19 | Purchased 1,600 shares of Donna Karan at $46.20 per share plus a $100 commission. | ||
| Dec. | 31 | Fair value of the short-term investments in trading securities is $228,725. |
2019
| Feb. | 27 | Purchased 3,900 shares of HCA at $37 per share plus a $430 commission. | ||
| Mar. | 3 | Sold 2,000 shares of Hunt at $32 per share less a $130 commission. | ||
| June | 21 | Sold 2,300 shares of Lucent at $34.75 per share less a $37 commission. | ||
| June | 30 | Purchased 1,400 shares of Black & Decker at $47.50 per share plus a $595 commission. | ||
| Nov. | 1 | Sold 1,600 shares of Donna Karan at $46.20 per share less a $119 commission. | ||
| Dec. | 31 | Fair value of the short-term investments in trading securities is $216,000. |
Required: Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)
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Accounting Principles Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
8th Canadian Edition
978-1119502425
