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ans the short questions please I'll rate any wrong or incomplete ans will call 'em for...

ans the short questions please I'll rate any wrong or incomplete ans will call 'em for question refund thanks.

Fair Value Journal Entries, Trading Investments

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:

Name		Number of Shares	Total Cost	Total Fair Value
Griffin Inc.		1,300	$17,420	$16,370
Luck Company		650	21,320	19,830
Wilson Company		200	6,400	6,530
	Total		$45,140	$42,730

On May 10, Year 2, Gruden Bancorp Inc. purchased 600 shares of Carroll Inc., at $32 per share plus a $120 brokerage commission.

Provide the journal entries to record the following:

a. The adjustment of the trading security portfolio to fair value on December 31, Year 1.

Year 1 Dec. 31

b. The May 10, Year 2, purchase of Carroll Inc., stock.

Year 2 May 10

* Fair Value Journal Entries, Available-for-Sale Investments

Storm, Inc. purchased the following available-for-sale securities during Year 1, its first year of operations:

Name		Number of Shares	Cost
Dust Devil, Inc.		1,100		$32,670
Gale Co.		400		28,760
Whirlwind Co.		2,200		63,800
	Total			$125,230

The market price per share for the available-for-sale security portfolio on December 31, Year 1 was as follows:

	Market Price per Share
	Dec. 31, Year 1
Dust Devil, Inc	$21
Gale Co.	78.5
Whirlwind Co.	28

a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, Year 1.

Year 1 Dec. 31

b. Is there any impact of December 31, Year 1 journal entry on the income statement?

, any unrealized gain/loss is reported of the

Expert Solution

Solution 1 - Journal Entry Worksheet of Gruden Bancorp Inc.

Date	Accounts Title and Explanation	Debit	Credit
Year 1, December 31	Unrealised loss on Trading Securities ($45140 - $42730)	$2410
	Trading Securities		$2410
	(Recording of unrealised loss on trading securities)

Year 2, May 10	Shares of Carroll Inc (600*$32)	$19200
	Brokerage Fees	$120
	Cash		$19320
	(Recording of Purchase of Trading Securities)

Solution 2 - (a) Journal Entry Worksheet of Storm Inc.

Cost of portfolio = $125230

Date	Accounts Title and Explanation	Debit	Credit
Year 1, December 31	Unrealized loss on Investment ($125230 - $116100)	$9130
	Investment (Available for sale securities)		$9130
	(Recording of Fair value adjustment of portfolio)

Working Note - Calculation of Fair Market Value of Portfolio

Particulars	Amount
Dust Devil, Inc (1100*$21)	$23100
Gale Inc.(400*$78.5)	$31400
Whirlwind Inc (2200*$28)	$61600
Total Fair Market Value	$116100

Journal (b) - No, There will not be any impact on Income statement. Since investment are available for sale security. Such loss is deducted from shareholders equity and second effect is deducted from Investment value.

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