Question

UPDATED, please help me check my work and complete the missing parts

Harris Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions relate to its short-term investments in its trading securities in 2015 Mar 10 Purchased 2,400 shares of AOL at $61.15 per share plus a $1,545 commission. May 7 Purchased 5,000 shares of MTV at $36.25 per share plus a $2,955 commission. Sept. 1 Purchased 1,175 shares of UPS at $57.25 per share plus a $1,250 commission Dec. 31 Fair Value of the short-term investments in trading securities is $398,000 1. Prepare the journal entries to record the above transactions Date General Journal Debit Credit 3/10 Short-Term Investments Trading AOL 148,305 Cash 148,305 5/7 Short-Term Investments Trading MTV 184,205 Cash 184,205 9/1 Short-Term Investments Trading UPS 62,644 Cash 62,644 1 12/31 Fair Value Adjustment Trading 2.846 Unrealized Gain Income 2.846 2. Calculate the cost of the portfolio owned on December 31, 2015 148,305184,205 62,644 395,154 3. Calculate the Unrealized Gain or Loss on the portfolio on December 31,2015 398,000 395,1542,846 (gain) 4.Prepare the adjusting entry to record any necessary fair value adjustments for the portfolio of trading securities. Date General Journal Debit Credit 12/31 Fair Value Adjustment-Trading 2.846 Unrealized Gain Income 2,846 5. Calculate the ending value of the Fair Value- Trading account. Unadjusted balance $0 (first year in operation) Fair Value Adj - Trading $2,846 Dr. Ending balance: $2,846
Can you please check over this work and help me answer what's left. Thanks.

Answer 1

Note: Only the incorrect portions have been corrected and shown below.

1.

Date	General Journal	Debit	Credit
9/1	Short-term investments-Trading-UPS	68519
	Cash [(1175 x $57.25) + $1250]		68519
12/31	Unrealized loss-income	3029
	Fair value adjustment-Trading		3029

Note: The cost of UPS has been rounded off to the nearest whole dollar. Kindly round off as required.

2. Cost of portfolio on December 31, 2015 = $148305 + 184205 + 68519 = $401029

3. Unrealized loss = Cost - Fair value = $401029 - $398000 = $3029

4.

Date	General Journal	Debit	Credit
12/31	Unrealized loss-income	3029
	Fair value adjustment-Trading		3029

5. Ending value of Fair Value-Trading account: $3029 credit

1.

Date	General Journal	Debit	Credit
April 26	Cash [(5000 x $34.50) - $2125]	170375
	Loss on sale of short-term investment	13830
	Short-term investments-Trading-MTV		184205
April 27	Cash [(1175 x $60.50) - $1768]	69320
	Gain on sale of short-term investment		801
	Short-term investments-Trading-UPS		68519

Note: The cash received from sale of UPS has been rounded off to the nearest whole dollar. Kindly round off as required.

2. Cost of portfolio on December 31, 2016 = $148305 + 613850 + 46305 = $808460

3. Unrealized gain = Fair value - Cost = $826000 - $808460 = $17540

4.

Date	General Journal	Debit	Credit
12/31	Fair value adjustment-Trading ($17540 + $3029)	20569
	Unrealized gain-income		20569

5. Ending value of Fair Value-Trading account: $17540 debit