Question

(b) Post to the investment accounts. (Use T-accounts.)

(c) Prepare the adjusting entry at December 31, 2018 to report the portfolio at fair value

dShow the balance sheet presentation at December 31, 2018, for the investment-related accounts.

Problem 16-05A a-d (Part Level Submission) The following securities are in Sunland Company's portfolio of long-term securities at December 31, 2020. Cost 1,000 shares of Willhite Corporation common stock $50,000 1,400 shares of Hutcherson Corporation 89,600 common stock 1,200 shares of Downing Corporation preferred stock 36,000 On December 31, 2020, the total cost of the portfolio equaled total fair value. Sunland had the following transactions related to the securities during 2021 Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $53 per share. 28 Purchased 430 shares of $69 par value common stock of Liggett Corporation at $77 per share. Received a cash dividend of $1.00 per share on Hutcherson Corp 30 common stock. Feb. 8 Received cash dividends of $0.50 per share on Downing Corp. preferred stock 18 Sold all 1,200 shares of Downing Corp. preferred stock at $29 per share. July 30 Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Sept. 6 Purchased an additional 960 shares of $15 par value common stock of Liggett Corporation at $81 per share Dec. 1 Received a cash dividend of $1.30 per share on Liggett Corporation common stock At December 31, 2021, the fair values of the securities were: Hutcherson Corporation common stock $68 per shares Liggett Corporation common stock $71 per share Prepare journal entries to record the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Esplanation Debit Credit Cash Stock Investments Gain on Sale of Stock Investments Stock Investments Cash Cash Dividend Revenue Cash Dividend Revenue Cash Loss on Sale of Stock Investments Gain on Sale of Stock Investments Stock Investments Gain on Sale of Stock Investments Click if you would like to Show Work for this question: Open Show Work

Answer 1

Journal Accounts Title and explanations Cash (1000*53) Stock Investments Gain on sale of stock investments (Sale of 1000 shares of Willhill corporation at $ 53 per share) Debit Credit Date 20-Jan-21 53,000 50,000 3,000 Stock Investments (430*77) 33,110 28-Jan-21 Cash 33,110 (Purchase of 430 shares of Ligget Corporation at $ 77 per share) Cash (1400*1) Dividend received 30-Jan-21 1,400 1,400 (To record receipt of dividend on investments) Cash (1200*0.5) Dividend received (To record receipt of dividend on investments) 08-Feb-21 600 600 Cash (1200*29) Loss on sale of stock investments Stock Investments (Sale of 1200 shares of Downing corporation at $ 29 per share) 18-Feb-21 34,800 1,200 36,000 Cash (1400*1) 30-Jul-21 1,400 Dividend received 1,400 (To record receipt of dividend on investments)

Cash (1390*1.3) 1,807 01-Dec-21 Dividend received 1,807 (To record receipt of dividend on investments) Stock Investments (1400*4) Unrealized gain on stock investments 31-Dec-21 5,600 5,600 C (To record 1400 shares in Hutcherson Corp. at $ 68 per share) Unrealized loss on Stock investments 31-Dec-21 12,180 Stock Investments [(430*6)+(960*10)] 12,180 (To record 1390 shares in Ligget Corp at $ 71 per share)

Ledger Stock Investments C Particulars 01-Jan-20 Balance b/d 28-Jan-21 Cash Willhite Hutherson Downing Willhite Hutherson Total Date Liggett Total Date Particulars Downing Liggett 36,000 0-Jan-21 Cash 50,000 50,000 50,000 89.600 1,75,600 34,800 33,110 33,110 18-Feb-21 Cash 34,800 6-Sep-21 Cash Loss on sale of stock inv 77,760 18-Feb-21 1,200 1.200 77.760 L-Dec-21 Unrealized gain on inv Unrealized Loss on inv 5,600 5,600 L- Dec-21 12,180 12,180 31-Dec-21 Balance c/d 95.200 98.690 1,93,890 Total 50,000 Total 95.200 36,000 1,10,870 2,92,070 0.000 5,200 5,000 1,10,870 2,92,070