Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016. Cost Fair Value Investment in Readfield Company common stock $125,000 $115,500 Investment in Lee Company common stock $100,000 $ 80,000 Investment in Stern Company common stock $250,000 $300,000 Investment in Jones Company common stock $180,000 $190,000 $655,000 $685,500 These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments. During the year 2017, Lee Company’s stock was sold for $102,000. Jamison purchased common stock of Earnhart Company at a cost of $163,000. At the end of December 2017, the fair values of the trading securities are as follows: Readfield’s common stock- $111,800, Stern’s common stock- $310,000, Jones’ common stock- $171600, and Earnhart’s common stock- $159,250. . Prepare journal entry to record the purchase of Earnhart’s common stock by Jamison, calculate the fair value of the portfolio as of December 31, 2017, and make the adjustment entry for the portfolio at December 31, 2017 to report the fair value of investment in the balance sheet.

Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016. Cost Fair Value Investment in Readfield Company common stock $125,000 $115,500 Investment in Lee Company common stock $100,000 $ 80,000 Investment in Stern Company common stock $250,000 $300,000 Investment in Jones Company common stock $180,000 $190,000 $655,000 $685,500 These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments. During the year 2017, Lee Company’s stock was sold for $102,000. Jamison purchased common stock of Earnhart Company at a cost of $163,000. At the end of December 2017, the fair values of the trading securities are as follows: Readfield’s common stock- $111,800, Stern’s common stock- $310,000, Jones’ common stock- $171600, and Earnhart’s common stock- $159,250. . Prepare journal entry to record the purchase of Earnhart’s common stock by Jamison, calculate the fair value of the portfolio as of December 31, 2017, and make the adjustment entry for the portfolio at December 31, 2017 to report the fair value of investment in the balance sheet.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 16E

See similar textbooks

Related questions

Question

Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016.

Cost Fair Value

Investment in Readfield Company common stock $125,000 $115,500

Investment in Lee Company common stock $100,000 $ 80,000

Investment in Stern Company common stock $250,000 $300,000

Investment in Jones Company common stock $180,000 $190,000

$655,000 $685,500

These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments.

During the year 2017, Lee Company’s stock was sold for $102,000. Jamison purchased common stock of Earnhart Company at a cost of $163,000.

At the end of December 2017, the fair values of the trading securities are as follows:

Readfield’s common stock- $111,800, Stern’s common stock- $310,000, Jones’ common stock- $171600, and Earnhart’s common stock- $159,250.

. Prepare journal entry to record the purchase of Earnhart’s common stock by Jamison, calculate the fair value of the portfolio as of December 31, 2017, and make the adjustment entry for the portfolio at December 31, 2017 to report the fair value of investment in the balance sheet.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.