perkins company

Project Description:

perkins company has the following securities in its investment portfolio on december 31, 2012 (all securities were purchased in 2012):

2,000 shares of anderson co. common stock which cost $48,500
10,000 shares of mathews ltd. common stock which cost $580,000
5,000 shares of king company preferred stock which cost $255,000
the securities fair value adjustment account shows a credit of $10,100 at the end
of 2012.
in 2013, perkins completed the following securities transactions.
1. on january 15, sold 2,000 shares of anderson’s common stock at $26
per share less fees of $1,150
2. on april 17, purchased 1,000 shares of castle’s common stock at $33.50
per share plus fees of $1,980
on december 31, 2013, the market values per share of these securities were:
mathews ltd. $65
king co. $48
castle co. $29
in addition, the accounting supervisor of perkins told you that, even though all these securities have readily determinable fair values, perkins will not actively trade these securities because the top management intends to hold them for more than one year. the company only adjusts the fair value account at yearend and does not reverse prior fair value adjustments during the year. changes in fair values are considered to be temporary.

(a) prepare the entry for the security sale on january 15, 2013.

(b) prepare the journal entry to record the security purchase on april 17, 2013.

"(c) compute the unrealized gains or losses and prepare the adjusting entry for perkins on december 31, 2013."

(d) how should the unrealized gains or losses be reported on perkins’s balance sheet?
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Price Type: Negotiable

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