Question
In: Accounting
Exercise 17-11 Concord Corporation made the following cash purchases of securities during 2020, which is the...
Exercise 17-11
Concord Corporation made the following cash purchases of
securities during 2020, which is the first year in which Concord
invested in securities.
| 1. | On January 15, purchased 11,000 shares of Sanchez Company’s common stock at $33.50 per share plus commission $2,184. | |
| 2. | On April 1, purchased 5,500 shares of Vicario Co.’s common stock at $52 per share plus commission $3,701. | |
| 3. | On September 10, purchased 7,700 shares of WTA Co.’s preferred stock at $26.50 per share plus commission $5,398. |
On May 20, 2020, Concord sold 3,960 shares of Sanchez Company’s
common stock at a market price of $35 per share less brokerage
commissions, taxes, and fees of $4,235. The year-end fair values
per share were Sanchez $30, Vicario $55, and WTA $28. In addition,
the chief accountant of Concord 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.
a.) Prepare the journal entries to record the above three security purchases. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
b.) Prepare the journal entry for the
security sale on May 20. (Round answers to 0 decimal
places, e.g. 2,500. Credit account titles
are automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
c.) Compute the unrealized gains or losses. (Round
answer to 0 decimal places, e.g. 2,500.)
d.)
Prepare the adjusting entries for Concord on December 31, 2020.
(Round answers to 0 decimal places, e.g. 2,500. Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter 0 for the
amounts.)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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of Sanchez Company’s common stock at $40.20 per share plus
commission $2,030. 2. On April 1, purchased 5,050 shares of Vicario
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On January 15, purchased 10,350 shares of Nirmala Corp.’s
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On April 1, purchased 5,750 shares of Oxana Corp.’s common
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3.
On September 10, purchased 8,050 shares of WTA Corp.’s
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2.
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1.
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