Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: 1 Name Number of Shares Total Cost Total Fair Value 2 Griffin Inc. 1,450.00 $29,000.00 $31,900.00 3 Luck Company 1,300.00 35,100.00 28,600.00 4 Wilson Company 860.00 30,960.00 26,660.00 5 Total $95,060.00 $87,160.00 On May 10, Year 2, Gruden Bancorp Inc. purchased 930 shares of Carroll Inc. at $25 per share plus a $170 brokerage commission. Required: A. Provide the journal entry to record the adjustment of the trading security portfolio to fair value on December 31, Year 1.* B. Provide the journal entry to record the May 10, Year 2, purchase of Carroll Inc. stock.* *Refer to the Chart of Accounts for exact wording of account titles
Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows: 1 Name Number of Shares Total Cost Total Fair Value 2 Griffin Inc. 1,450.00 $29,000.00 $31,900.00 3 Luck Company 1,300.00 35,100.00 28,600.00 4 Wilson Company 860.00 30,960.00 26,660.00 5 Total $95,060.00 $87,160.00 On May 10, Year 2, Gruden Bancorp Inc. purchased 930 shares of Carroll Inc. at $25 per share plus a $170 brokerage commission. Required: A. Provide the journal entry to record the adjustment of the trading security portfolio to fair value on December 31, Year 1.* B. Provide the journal entry to record the May 10, Year 2, purchase of Carroll Inc. stock.* *Refer to the Chart of Accounts for exact wording of account titles
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 16E
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Question
Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows:
|
1
|
Name
|
Number of Shares
|
Total Cost
|
Total Fair Value
|
|
2
|
Griffin Inc.
|
1,450.00
|
$29,000.00
|
$31,900.00
|
|
3
|
Luck Company
|
1,300.00
|
35,100.00
|
28,600.00
|
|
4
|
Wilson Company
|
860.00
|
30,960.00
|
26,660.00
|
|
5
|
Total
|
|
$95,060.00
|
$87,160.00
|
On May 10, Year 2, Gruden Bancorp Inc. purchased 930 shares of Carroll Inc. at $25 per share plus a $170 brokerage commission.
Required:
| A. | Provide the |
| B. | Provide the journal entry to record the May 10, Year 2, purchase of Carroll Inc. stock.* |
| *Refer to the Chart of Accounts for exact wording of account titles. |
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