Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wildhorse Corporation made the following cash purchases of securities during 2020, which is the first year in which Wildhorse invested in securities. On January 15,

Wildhorse Corporation made the following cash purchases of securities during 2020, which is the first year in which Wildhorse invested in securities. On January 15, purchased 8,000 shares of Sanchez Company's common stock at $33.50 per share plus commission $1.584. 1. 2. On April 1, purchased 4,000 shares of Vicario Co's common stock at $52 per share plus commission $2,696. 3. On September 10, purchased 5,600 shares of WTA Co's preferred stock at $26.50 per share plus commission $3,928. On May 20, 2020, Wildhorse sold 3,200 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,080. The year-end fair values per share were Sanchez $30. Vicario $55, and WTA $28. In addition, the chief accountant of Wildhorse told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases. On May 20, 2020. Wildhorse sold 3,200 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,080. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Wildhorse told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases. Prepare the journal entries to record the above three security purchases. (Round answers to O decimal places, eg. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation (1) De (2) (3) eTextbook and Media. List of Accounts Prepare the journal entry for the security sale on May 20. (Round answers to O decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date May 20, 2020 Account Titles and Explanation eTextbook and Media List of Accounts Compute the unrealized gains or losses. (Round answer to O decimal places, eg. 2,500.) Unrealized [ Prepare the adjusting entries for Wildhorse on December 31, 2020. (Round answers to O decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Dec. 31, 2020 Account Titles and Explanation Prepare the adjusting entries for Wildhorse on December 31, 2020. (Round answers to 0 decimal places, eg. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Dec. 31, 2020 Account Titles and Explanation eTextbook and Media List of Accounts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Services And Markets

Authors: Dr. Punithavathy Pandian

8125931201, 978-8125931201

More Books

Students also viewed these Accounting questions

Question

What does capital needs analysis provide?

Answered: 1 week ago