Reference no: EM132955108
Question - Ben Inc. has the following securities in its investment portfolio on December 31, 2020.
All securities were purchased in 2020.
Ben does not have significant influence over any of these companies.
Ben plans to hold them for more than a year at least.
Company 1: Andy
Shares: 5000
Cost: $81,950
Company 2: Don
Shares: 3000
Cost: 152,780
Company 3: Citi
Shares: 12000
Cost: 560000
Fair Value Adjustment balance at end of 2020 has a debit of $8,300
The following transactions were completed in 2021:
On March 15, sold 5000 shares of Andy for $18 per share less fees of $ 3,500
On June 6, purchased 9000 shares of Zeke common stock at $ 21.70 per share plus fees of $ 2800
Market Values per share as of December 31, 2021 were as follows:
Company 1: Don
Cost Per Share: $62.50
Company 2: Citi
Cost Per Share: $46
Company 3: Zeke
Cost Per Share:
Required -
1. Prepare the journal entry for the sale of Andy.
2. Prepare the journal entry for the purchase of Zeke.
3. Compute the unrealized gains and losses and the adjusting entry on December 31, 2021.