4. (15 points) Counting Services Inc. has the following portfolio of trading equ
ID: 2512964 • Letter: 4
Question
4. (15 points) Counting Services Inc. has the following portfolio of trading equity securities at 12/31/17. All securities were purchased during 2017.
Symbol # shares Total Cost Market Value
AAPL 1000 $102,000 see below
BMX 2000 $ 47,000 see below
GNC 3000 $ 64,000 see below
Total $213,000
Prepare the adjustment necessary at 12/31/17.
On February 12, 2018, Counting Services sells 1,000 shares of AAPL for $115,000. Prepare the journal entry.
The total cost of the two remaining securities is $111,000 and the market value is $130,000 at March 31, 2018. Prepare the adjusting entry.
AAPL
BMX
GNC
S – V
$115,000
$63,000
$72,000
AAPL
BMX
GNC
S – V
$115,000
$63,000
$72,000
Explanation / Answer
At year end, share shall be valued at cost/book value or market value of the share which is lower.
In this case market value has not been given as on 12/31/2017, therefore there is no need to do adjustmnet entry.
On February 12, 2018
Following entry will be passed on sale of share:
Bank/Cash A/c Dr. $115000
AAPL Shares Cr. $102000
Gain on sale of shares Cr. $13000
On March 31, 2018
As valuation of shares will be at year end i.e. 12/31/2018, therefore no adjustment entry will be passed for remaing shares.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.