Question

Gilder Company has the following securities in its portfolio of trading equity securities on 12/31/19:

                                                                            Cost             Fair Value

            5,000 shares of Diamond Corp.            $146,000           $126,500

            10,000 shares of Culver Co.                   180,000           185,000

            2,000 shares of Barbee Co.                     52,000               52,600

                                                                        $378,000           $364,100

All of the securities had been purchased in 2019.

In 2020, Gilder completed the following securities transactions:

    3/1 Sold 5,000 shares of Diamond Corp. @ $26 less fees of $1,500.

    7/1 Bought 600 shares of Vogle Stores @ $42 plus fees of $550.

The Gilder Company portfolio of trading equity securities appeared at the end of 2020:

                                                                           Cost             Fair Value

            10,000 shares of Culver Co.                   $180,000           $198,500

            2,000 shares of Barbee Co.                     52,000               53,000

                 600 shares of Vogle Stores                   25,750               23,800

                                                                        $257,750           $275,300

Required: Prepare the general journal entries for Gilder Company for:

1. the 2019 adjusting entry.
2. the sale of the Diamond Corp. stock and the purchase of the Vogle Stores stock
3. the 12/31/20 adjusting entry.       

Answer 1

a) 2019 adjusting entry $13,900 Unrealised loss on trading securities DY To valuation allowance $ 13,900 fairvalue 5,000 shares of Diamond corp. Cost $146,000 $126,500 Difference $(19,500) 10,000 shares of Culver Co. $185,000 $5,000 $180,000 $ 52,000 2,000 shares of Barbee Co. $ 52,600 $600 $378,000 $364,100 b) 3/1/2010 $128,500 Cash all or {[5,000 x 21) – 1,500} Loss on sales al $ 17, 500 DY To Investment in Diamond Corp $146,000 $25,750 Investment in Volge stores al DV $25,750 To Carhak {[ 600x +2] +5504 C) 12/31/6 ady ushing en my i allowance al valuation DY Dr . $17,550 To unrealised gain on trading securities $ 17,550 Scanned with (275,300 - 251,750) de CamScanner