Question

C-1

Carlsville Company, which began operations in 2017, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities.

2017

Jan.		20		Purchased 800 shares of Ford Motor Co. at $27 per share plus a $125 commission.
Feb.		9		Purchased 2,500 shares of Lucent at $35 per share plus a $190 commission.
Oct.		12		Purchased 760 shares of Z-Seven at $8.10 per share plus a $95 commission.
Dec.		31		Fair value of the short-term investments in trading securities is $121,500.

2018

Apr.		15		Sold 800 shares of Ford Motor Co. at $30 per share less a $295 commission.
July		5		Sold 760 shares of Z-Seven at $10.50 per share less a $95 commission.
July		22		Purchased 1,700 shares of Hunt Corp. at $38 per share plus a $225 commission.
Aug.		19		Purchased 2,000 shares of Donna Karan at $47.50 per share plus a $105 commission.
Dec.		31		Fair value of the short-term investments in trading securities is $241,240.

2019

Feb.		27		Purchased 3,900 shares of HCA at $31 per share plus a $400 commission.
Mar.		3		Sold 1,700 shares of Hunt at $33 per share less a $120 commission.
June		21		Sold 2,500 shares of Lucent at $32.75 per share less a $32 commission.
June		30		Purchased 1,300 shares of Black & Decker at $47.50 per share plus a $595 commission.
Nov.		1		Sold 2,000 shares of Donna Karan at $47.50 per share less a $124 commission.
Dec.		31		Fair value of the short-term investments in trading securities is $189,100.

Required:
Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

2017

2018

2019

Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities.

Answer 1

Carlsville Company General Journal Entries For The Year Ended Dec 2017
20-Jan	Short term investment-Ford Motor	21,725
	Cash		21,725
	(800*27)+125
9-Feb	Short term Investment-Lucent	87,690
	Cash		87,690
	(2500*35)+190
12-Oct	Short term investment-Z-seven	6,251
	Cash		6,251
	(760*8.1)+95
31-Dec	Fair Value adjustment-trading	5,834
	Unrealized gain		5,834
	121500-(21725+87690+6251)

Carlsville Company General Journal Entries For The Year Ended Dec 2018
15-Apr	Cash 800*30-295	23705
	Short term investment-Ford		21725
	Gain on short term investment		1980
5-Jul	Cash (760*10.50)-95	7885
	Short term investment-Z-seven		6251
	Gain on short term investment		1634
22-Jul	Short term investment-Hunt	64825
	Cash		64825
	(1700*38)+225
19-Aug	Short term investment-Donna Karren	95105
	Cash		95105
	(2000*47.5)+105
31-Dec	Unrealized Loss	12214
	Fair Value adjustment-trading		12214

Carlsville Company General Journal Entries For The Year Ended Dec 2019
27-Feb	Short term investment-HCA	121300
	Cash		121300
	(3900*31)+400
3-Mar	Cash (1700*33)+120	56220
	Loss on sale of Short term investment	8605
	Short term investment-Hunt		64825
21-Jul	Cash (2500*32.75)+32	81907
	Loss on sale of Short term investment	5783
	Short term investment-Lucent		87690
30-Jun	Short term investment-Black & Decker	62345
	Cash		62345
	(1300*47.5)+595
1-Nov	Cash (2000*47.5)-124	94876
	Loss on sale of short term investment	229
	Short term investment-Donna Karan		95105