Question

Carlsville Company, which began operations in 2017, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities 2017 Jan. 20 Purchased 900 shares of Ford Motor Co. at $27 per share plus a $130 commission Feb. 9 Purchased 2,400 shares of Lucent at $40 per share plus a $20e commission. Oct. 12 Purchased 700 shares of Z-Seven at $7.10 per share plus a $95 commission. Dec. 31 Fair value of the short-term investments in trading securities is $131,100. 2018 Apr. 15 Sold 900 shares of Ford Motor Co. at $29 per share less a $300 commission July 5 Sold 700 shares of 2-Seven at $10.75 per share less a $90 commission July 22 Purchased 2,000 shares of Hunt Corp. at $38 per share plus a $225 commission. Aug. 19 Purchased 2,000 shares of Donna Karan at $48.00 per share plus a $10e commission. Dec. 31 Fair value of the short-term investments in trading securities is $262,925. 2019 Feb. 27 Purchased 3,900 shares of HCA at $35 per share plus a $440 commission. 3 Sold 2,000 shares of Hunt at $33 per share less a $125 commission. Mar. June 21 Sold 2,400 shares of Lucent at $37.75 per share less a $42 comeission June 30 Purchased 1,200 shares of Black & Decker at $47.50 per share plus a $5commission. Nov 1 Sold 2,000 shares of Donna Karan at $48.00 per share less a $119 commission. Dec. 31 Fair value of the short-term investments in trading securities is $200,100. Required: Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.) Complete this question by entering your answers in the tabs below. 2017 2018 2019 Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfollo of trading securities. View transaction list View journal entry worksheet

Answer 1

Debit ($) Credit ($) 24430 24430 96200 96200 1 Date Particulars Short-term invesstments - Trading securities 2 Jan 20-2017 (F Co.) Cash (900*27)+130 (To record the purchase of Fco. shares) Short-term invesstments - Trading securities 5 Feb 9-2017 (L co.) Cash (2400*40)+200 7 (To record the purchase of L co. shares) Short-term invesstments - Trading securities 8 Oct 12-2017 (z Co.) | Cash (700*7.1)+95 10 (To record the purchase of Z Co. shares.) 11 Dec 31-2017 Unrealied loss-income (131100-125695) 12 Fair value adjustment - Trading (ST) 13 |(To record the fair value adjustment) 14 15 Apr 15-2018 Cash (900*29)-300 16 Gain on sale of investments Short-term investments-Trading (F Co.) 18 (To record the sale of F Co. shares) 5065 9 5065 5405 5405 25800 13701 24430 17

7435 2370 5065 76225 76225 961001 1 96100 19 July 5-2018 Cash (700*10.75)-90 20 Gain on sale of investments 21 Short-term investments-Trading (Z Co.) (To record the sale of Z Co. shares) 23 July 22-2018 Short-term investments-Trading (H Co.) Cash (2000*38)+225 (To record the purchase of H co. shares) 26 Aug 19-2018 Short-term investments-Trading (D.K) 27 Cash (2000*48)+100 28 (To record the purchase of D.K shares) 29 Dec 31-2018 Unrealized loss-Income (262925-205560) Fair value adjustment- Trading (ST) 31 (To record the fair value adjustment) 32 Feb 27-2019 Short-term investments-Trading (HCA) Cash (3900*35)+440 35 (To record the purchase of HCA shares) 36 Mar 3-2019 Cash (2000*33)-125 37 Loss on sale of short-term investments 38 Short-term investments - H Co. 39 (To record the sale of H Co. shares) 57365 30 57365 136940|| 136940 65875 103501 76225

43 45 46 40 June 21-2019 Cash (2400*37.75)-42 90558 41 Loss on sale of short-term investments 5642 42 Short-term investments - L Co. 96200 (To record the purchase of L Co. shares) 44 June 30-2019 Short-term investments-Trading (B&D) 57500|| Cash (1200*47.5)+500) 57500 (To record the purchase of R&D shares) 47 (in question the 500 value didn't clear so I have taken 500 if there any other value please calculate that) 48 Nov 1-2019 Cash (2000*48)-119 95881 Loss on sale of investments 219) Short-term investments-Trading (D.K) 96100 51 (To record the sale of D.K Co. shares) Dec 31-2019 Fair value adjustment-Trading (ST) 686251 53 Unrealiized gain-income (200100-131475) 68625 54 (To record the fair valuee adjustment) 50