COMPUSTAT COMPANY held the following short-term investments in marketable securi
ID: 2758081 • Letter: C
Question
COMPUSTAT COMPANY held the following short-term investments in marketable securities on December 31, 2014:
COST CURRENT MARKET
VALUE
JC Penney Company common stock $37,200 $41,100
Exxon Corp. stock 50,400 48,500
Transamerica Corp. stock 69,600 63,900
Times Mirror Co. 85,500 84,100
$242,700 $237,600
Compustat had no short-term investments prior to 2014. Prepare the December 31 adjusting entry to record the change in fair market value of the investments. What is the entry on March 20, 2015 to sell the Penny stock for $42,000 and the Exxon stock for $51,400. Finally, what is the end balance of the Marketable securities on March 30, 2015?
Explanation / Answer
a) Provision for Depreciation A/c 5100
To Short Term Investments A/c 5100
B) Bank A/c 42000
To Penny Investment 41100
To Profit and Loss A/c 900
C)
Bank A/c 51400
To Penny Investment 48500
To Profit and Loss A/c 2900
C) End Balance of Marketable Securities = 63900+84100 = 148000
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