On December 21, 2020, Buffalo Company provided you with the following information regarding its equity investments. December 31, 2020 Investments (Trading) Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $ 19,200 $ 18,300 $( 900 ) Colorado Co. stock 9,500 8,600 ( 900 ) Buffaloes Co. stock 19,200 19,800 600 Total of portfolio $ 47,900 $ 46,700 ( 1,200 ) Previous fair value adjustment balance 0 Fair value adjustment—Cr. $( 1,200 ) During 2021, Colorado Co. stock was sold for $ 9,150. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$ 18,400; Buffaloes Co. stock—$ 19,690. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2020. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021. (c) Prepare the adjusting journal entry needed on December 31, 2021. 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.) No. Account Titles and Explanation Debit Credit (a) enter an account title to record transaction A enter a debit amount enter a credit amount enter an account title to record transaction A enter a debit amount enter a credit amount (b) enter an account title to record transaction B enter a debit amount enter a credit amount enter an account title to record transaction B enter a debit amount enter a credit amount enter an account title to record transaction B enter a debit amount enter a credit amount (c) enter an account title to record transaction C enter a debit amount enter a credit amount enter an account title to record transaction C enter a debit amount enter a credit amount
On December 21, 2020, Buffalo Company provided you with the following information regarding its equity investments. December 31, 2020 Investments (Trading) Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $ 19,200 $ 18,300 $( 900 ) Colorado Co. stock 9,500 8,600 ( 900 ) Buffaloes Co. stock 19,200 19,800 600 Total of portfolio $ 47,900 $ 46,700 ( 1,200 ) Previous fair value adjustment balance 0 Fair value adjustment—Cr. $( 1,200 ) During 2021, Colorado Co. stock was sold for $ 9,150. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$ 18,400; Buffaloes Co. stock—$ 19,690. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2020. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021. (c) Prepare the adjusting journal entry needed on December 31, 2021. 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.) No. Account Titles and Explanation Debit Credit (a) enter an account title to record transaction A enter a debit amount enter a credit amount enter an account title to record transaction A enter a debit amount enter a credit amount (b) enter an account title to record transaction B enter a debit amount enter a credit amount enter an account title to record transaction B enter a debit amount enter a credit amount enter an account title to record transaction B enter a debit amount enter a credit amount (c) enter an account title to record transaction C enter a debit amount enter a credit amount enter an account title to record transaction C enter a debit amount enter a credit amount
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...
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Question
On December 21, 2020, Buffalo Company provided you with the following information regarding its equity investments.
|
December 31, 2020
|
|||||||
|---|---|---|---|---|---|---|---|
|
Investments (Trading)
|
Cost
|
Fair Value
|
Unrealized Gain (Loss)
|
||||
|
Clemson Corp. stock
|
$ 19,200 | $ 18,300 | $( 900 | ) | |||
|
Colorado Co. stock
|
9,500 | 8,600 | ( 900 | ) | |||
|
Buffaloes Co. stock
|
19,200 | 19,800 | 600 | ||||
|
Total of portfolio
|
$ 47,900 | $ 46,700 | ( 1,200 | ) | |||
|
Previous fair value adjustment balance
|
0 | ||||||
|
Fair value adjustment—Cr.
|
$( 1,200 | ) |
During 2021, Colorado Co. stock was sold for $ 9,150. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$ 18,400; Buffaloes Co. stock—$ 19,690. None of the equity investments result in significant influence.
| (a) | Prepare the |
|
|---|---|---|
| (b) | Prepare the journal entry to record the sale of the Colorado Co. stock during 2021. | |
| (c) | Prepare the adjusting journal entry needed on December 31, 2021. |
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.)
|
No.
|
Account Titles and Explanation
|
Debit
|
Credit
|
|---|---|---|---|
|
(a)
|
enter an account title to record transaction A
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record transaction A
|
enter a debit amount
|
enter a credit amount
|
|
|
(b)
|
enter an account title to record transaction B
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record transaction B
|
enter a debit amount
|
enter a credit amount
|
|
|
enter an account title to record transaction B
|
enter a debit amount
|
enter a credit amount
|
|
|
(c)
|
enter an account title to record transaction C
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record transaction C
|
enter a debit amount
|
enter a credit amount
|
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