Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

(15 points) Counting Services Inc. has the following portfolio of trading equity

ID: 2513052 • Letter: #

Question

(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           115,000 BMX 2000 $47,000              63,000 GNC 3000 $64,000              72,000 Total   $213,000 a.       Prepare the adjustment necessary at 12/31/17. b.       On February 12, 2018, Counting Services sells 1,000 shares of AAPL for $115,000. Prepare the journal entry. c.       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. (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           115,000 BMX 2000 $47,000              63,000 GNC 3000 $64,000              72,000 Total   $213,000 a.       Prepare the adjustment necessary at 12/31/17. b.       On February 12, 2018, Counting Services sells 1,000 shares of AAPL for $115,000. Prepare the journal entry. c.       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.

Explanation / Answer

a) Date Account Titles Debit Credit 12/31/17 Securities Fair Value Adjustment (Trading) $37,000.00            Unrealized Holding Gain or Loss—Income $37,000.00 ($250,000 - $213,000) b) 2/12/2018 Cash $115,000.00          Trading Securities $115,000.00 c) 3/31/2018 Securities Fair Value Adjustment (Trading) $19,000.00            Unrealized Holding Gain or Loss—Income $19,000.00 ($130,000 - $111,000)