Question

Exercise 17-15 Swifty Company has the following securities in its portfolio on December 31, 2017. None of these investments are accounted for under the equity method Investments Fair Value 1,500 shares of Gordon, Inc., Common 5,000 shares of Wallace Corp. Common 400 shares of Martin, Inc., Preferred $77,600 172.000 63,500 $314,000 $73,200 167,200 65.100 $306,000 All of the securities were purchased in 2017. In 2018, Swifty completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., Common, $45 less fees of $1,200. April 1 Bought 700 shares of Earnhart Corp., Common, $75 plus fees of $1,300. Swifty's portfolio of equity securities appeared as follows on December 31, 2018 Investments Cost Fair Value 5,000 shares of Wallace Corp., Common $172,900 $167,700 700 shares of Earnhart Corp., Common 50,100 400 shares of Martin, Inc., Preferred 63.500 61.700 $290,200 $279.500 53.800 Prepare the general journal entries for Swifty Company for:

Answer 1

In the Books of Swifty
Date	Particulars	Debit	Credit
	Adjusting Entry for 2017
31-Dec-17	Unrealized gain/loss – other comprehensive income (314000-306000)	$8,000.00
	Available for sale security		$8,000.00
	Sale of Security
1-Mar-18	Cash (1500*45)-1200	$66,300.00
	Loss on Sale of Security (BF)	$6,900.00
	Available for sale security- Gordon		$73,200.00
	To Record Securrity Sold
	Purchase of Security
1-Apr-18	Available for sale security-Earnhart	$53,800.00
	Cash (700X 75)+1300		$53,800.00
	To Record security purchased
	Adjustment for year 2018
31-Dec-18	Unrealized gain/loss – other comprehensive income (290200-279500)	$10,700.00
	Available for sale security		$10,700.00
	To Record Fair Value adjustment