Unusual Events

Early in January, this year, an unusual event occurred when a big wind caused a boom to collapse, destroying $288,000 of outdoor rigging and $92,000 electronic gear (asset E) that had just been installed. While this kind of accident has occurred before, it has not happened often. The outdoor rigging and electronic gear were of a new business venture the company began early last year. The destroyed electronic equipment can be sold for scrap in the open market at 10% of cost. The outdoor rigging, bought early last year (depreciation: straight line, no salvage, 5 year life) can be sold on the used equipment market for book value. Management is disheartened, and is abandoning this component of the business. Had the venture continued, it would have had separate cash flows and operations. The company estimates that 30% of the overall SG&A for the January was directly related to the outdoor rigging and that the SG&A costs for the year are incurred at a smooth rate all year long.

a. Please provide Journal Entries for Unusual Events

Trading Securities

The company invests in trading securities. Year end market prices were :

Security	Price per share	Shares	Extension	Total
Security X	5	4,000	20,000
Security Y	3	2,000	6,000
Security Z	18	1,500	27,000
HAL	29	1,000	29,000
			82,000

The company held 4,000 shares of X, 2,000 shares of Y and 1,500 shares of Z at 12/31/20.

The company owns 1,000 shares of HAL Corp., which are also trading securities (used to be held for sale). At the end of 2020, HAL was priced at $29 per share.

b. Please provide Journal entries for Trading securities.

Reclass Needed

JKL, Inc. has an amount of $1,084,000 in a suspense account on its trial balance. The details of this amount are as follows (if you end up with a $1,000 rounding error, put the difference to lawsuit defense:
Legal & administrative cost of obtaining patent	195,000
Cost of development of product patented	580,000
Cost of defense of 2020 law suit challenging the patent	309,000

c. Please provide Journal Entries based off the information above.