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Accounting

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Marin Corporation made the following cash purchases of securities during 2017, which is the first year in which Marin invested in securities.

1. On January 15, purchased 10,220 shares of Sanchez Company's common stock at $36.90 per share plus commission $2,200.
2. On April 1, purchased 5,220 shares of Vicario Co.'s common stock at $57.20 per share plus commission $3,590.
3. On September 10, purchased 7,220 shares of WTA Co.'s preferred stock at $29.20 per share plus commission $5,130.

On May 20, 2017, Marin sold 4,220 shares of Sanchez Company's common stock at a market price of $39 per share less brokerage commissions, taxes, and fees of $4,070. The year-end fair values per share were Sanchez $33, Vicario $61, and WTA $30.80. In addition, the chief accountant of Marin told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.

Compute the unrealized gains or losses.

Prepare the adjusting entries for Marin on December 31, 2017.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92750180

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