Asked by Rachael Petersen on Apr 24, 2024
At December 31 2017 the trading securities portfolio held by the Darren Corporation consisted of the following investments:
1. 2000 shares of Temper common stock purchased for $42 per share.
2. 1500 shares of Logan common stock purchased for $50 per share.
At December 31 2017 the fair values per share were Temper $38 and Logan $54.
Instructions
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31 2017.
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31 2017.
Trading Securities Portfolio
A collection of marketable securities that a business holds for the purpose of reselling them in the short term to profit from market price changes.
Fair Value
An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.
Adjusting Entry
An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.
- Gauge and post in financial records the appreciations, depreciations, dividends earned, and interest-derived income from investments.
- Note the dealings related to the acquisition, offloading, and management of investment securities, including revisions for their fair value.
Learning Objectives
- Gauge and post in financial records the appreciations, depreciations, dividends earned, and interest-derived income from investments.
- Note the dealings related to the acquisition, offloading, and management of investment securities, including revisions for their fair value.
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