Question
Stoll Co.s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost Fair Value 55,000 shares of Company A common stock
Stoll Co.s long-term available-for-sale portfolio at December 31, 2016, consists of the following. Available-for-Sale Securities Cost Fair Value 55,000 shares of Company A common stock $ 1,033,600 $ 930,000 16,000 shares of Company B common stock 326,750 316,000 28,000 shares of Company C common stock 1,339,500 1,293,875 Stoll enters into the following long-term investment transactions during year 2017. Jan. 29 Sold 8,000 shares of Company B common stock for $162,375 less a brokerage fee of $2,800. Apr. 17 Purchased 20,000 shares of Company W common stock for $415,000 plus a brokerage fee of $2,500. The shares represent a 30% ownership in Company W. July 6 Purchased 11,000 shares of Company X common stock for $255,125 plus a brokerage fee of $2,500. The shares represent a 12% ownership in Company X. Aug. 22 Purchased 100,000 shares of Company Y common stock for $530,000 plus a brokerage fee of $7,300. The shares represent a 51% ownership in Company Y. Nov. 13 Purchased 15,000 shares of Company Z common stock for $531,800 plus a brokerage fee of $5,300. The shares represent a 5% ownership in Company Z. Dec. 9 Sold 55,000 shares of Company A common stock for $1,012,000 less a brokerage fee of $4,100. The fair values of its investments at December 31, 2017, are: B, $164,750; C, $1,222,625; W, $384,500; X, $238,250; Y, $1,064,500; and Z, 559,600. 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.
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