hi need detailed info on how to solve please Assume Postage People Company compl
ID: 2522206 • Letter: H
Question
hi need detailed info on how to solve please
Assume Postage People Company completed these long-term available-for sale investment transactions and recorded the folowing journal entries during 2016: EEB Cilick the icon to view the transactions) (Click the icon to view the journal entries) On May 21,2017, Postage People Company sold its investment in Robotics Co. stock for $28 per share 1. Journalize the sale. No explanation is required 2. How does the gain or loss that you recorded here differ from the gain or loss that was recorded at December 31,2016? 1. Journalize the sale. No explanation is required. (Abbreviation used. AFSS - available-for sale securities. Record debits first, then credits. Exclude explanations from any journal entries. If a journal entry is not required, select 'No entry required" in the first cell and leave the remaining cells blank) First, prepare the jourmal entry to record any necessary eliminations Accounts May 21 2. How does the gain or loss that you recorded here differ from the gain or loss that was recorded at December 31,2016? because it resulted from a change in the This gain on sale of investment is a/n) investments market value and not from the sale of the investment v .The loss recorded at December 31,2016, wasExplanation / Answer
The diference between this entry and the one recorded on Dec.31,2016 is that , the 2016 entry was for adjusting the value of the investment to the market value of the investment at the date of closing the financila accounts.The loss at that time was not realized, meaning there was no sale ofthe investment and the investment was still in the control of the company.
The entry we recorded now is for the actual sale of the investment, (meaning the company has lost control of the shares) and since there is a gain of $8 per share ($28- $20 -- selling price minus purchase price), this gain is actual realized gain.
Date Account Title Debit Credit May 21, 2017 Cash 16800 Gain on sale of Investments 4800 Investment in AFSS 12000Related Questions
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