Problem - Trading equity securities
Korman Company has the following securities in its portfolio of trading securities on December 31, 2014:
| |
Cost |
Fair Value |
| 5,000 shares of Thomas Corp., Common |
$151,000 |
$139,000 |
| 10,000 shares of Gant, Common |
182,000 |
190,000 |
| |
$333,000 |
$329,000 |
All of the securities had been purchased in 2014. In 2015, Korman completed the following securities transactions:
| March 1 |
Sold 5,000 shares of Thomas Corp., Common @ $31 less fees of $1,500. |
| April 1 |
Bought 600 shares of Werth Stores, Common @ $45 plus fees of $550. |
The Korman Company portfolio of trading securities appeared as follows on December 31, 2015:
| |
Cost |
Fair Value |
| 10,000 shares of Gant, Common |
$185,000 |
$195,500 |
| 600 shares of Werth Stores, Common |
27,550 |
25,500 |
| |
$212,550 |
$221,000
|
Instructions - Prepare the general journal entries (with explanations and dates) for Korman Company for:
(a) the 2014 adjusting entry.
(b) the sale of the Thomas Corp. stock.
(c) the purchase of the Werth Stores' stock.
(d) the 2015 adjusting entry.