Topic REFERENCE: Stockholders Equity Investments

A company has the following securities in its portfolio of equity securities on December 31, 2018:

Cost Fair Value

5,000 shares of ABC Corp., Common $151,000 $139,000

10,000 shares of OPQ, Common 184,000 190,000

$335,000 $329,000

All of the securities were purchased in 2018.

In 2019, the company completed the following securities transactions:

March 1 Sold 5,000 shares of ABC Corp., Common @ $32 less fees of $1,500.

April 1 Bought 600 shares of XYZ Inc., Common @ $45 plus fees of $550.

The company portfolio of equity securities appeared as follows on December 31, 2019:

Cost Fair Value

10,000 shares of OPQ, Common $184,000 $195,500

600 shares of XYZ Inc., Common 27,550 25,500

$211,550 $221,000

Using the attached T-account template, prepare entries for the company for the:

(a)2018 purchase of ABC Corp stock

(b)2018 purchase of OPQ stock

(c)2018 year-end adjusting entry, if necessary, for the investment in ABC Corp. Management classifies this investment as a trading security.

(d)2018 year-end adjusting entry, if necessary, for the investment in OPQ. Management classifies this investment as an available-for-sale security.

(e)2019 sale of the ABC Corp. stock

(f)2019 purchase of the XYZ Inc. stock

(g)2019 year-end adjusting entry, if necessary, for the investment in OPQ.

(h)2019 year-end adjusting entry, if necessary, for the investment in XYZ. Management classifies this investment as an available-for-sale security.

Label each entry a b c etc.