Required information

Problem 15-5A Long-term investment transactions; unrealized and realized gains and losses LO C2, P3, P4

[The following information applies to the questions displayed below.] Stoll Co.s long-term available-for-sale portfolio at December 31, 2016, consists of the following.

Available-for-Sale Securities	Cost			Fair Value
80,000 shares of Company A common stock	$	1,038,600		$	910,000
26,000 shares of Company B common stock		336,750			326,000
33,000 shares of Company C common stock		1,357,000			1,308,875

Stoll enters into the following long-term investment transactions during year 2017.

Jan.		29		Sold 13,000 shares of Company B common stock for $167,375 less a brokerage fee of $3,300.
Apr.		17		Purchased 21,000 shares of Company W common stock for $440,000 plus a brokerage fee of $3,000. The shares represent a 30% ownership in Company W.
July		6		Purchased 9,000 shares of Company X common stock for $257,625 plus a brokerage fee of $3,000. The shares represent a 10% ownership in Company X.
Aug.		22		Purchased 100,000 shares of Company Y common stock for $580,000 plus a brokerage fee of $7,800. The shares represent a 51% ownership in Company Y.
Nov.		13		Purchased 20,000 shares of Company Z common stock for $529,300 plus a brokerage fee of $5,800. The shares represent a 5% ownership in Company Z.
Dec.		9		Sold 80,000 shares of Company A common stock for $1,027,000 less a brokerage fee of $4,100.

The fair values of its investments at December 31, 2017, are: B, $167,250; C, $1,225,125; W, $387,000; X, $240,750; Y, $1,067,000; and Z, 562,100.

Problem 15-5A Part 1 and 2

Required: 1.Determine the amount Stoll should report on its December 31, 2017, balance sheet for its long-term investments in available-for-sale securities. 2. Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.

Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.

Fair Value Adjustment Computation - Available-for-Sale Securities
December 31, 2017 AFS Securities	# of shares	Cost	Fair Value	Unrealized Amount
Total

Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.

Journal entry worksheet

• Record the year-end adjusting entry for the securities portfolio as of December 31, 2017.

Note: Enter debits before credits.

Date

General Journal

Debit

Credit

Dec 31