On December 21, 2020, Waterway Company provided you with the following information regarding its equity investments....

 

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On December 21, 2020, Waterway Company provided you with the following information regarding its equity investments. Investments (Trading) Clemson Corp. stock Colorado Co. stock Buffaloes Co. stock Total of portfolio Previous fair value adjustment balance Fair value adjustment-Cr. December 31, 2020 Cost $19,900 10,300 (b) 19,900 $50,100 No. Account Titles and Explanation (a) Unrealized Holding Gain or Loss - Equity Fair Value Adjustment Cash During 2021, Colorado Co. stock was sold for $9.750. The fair value of the stock on December 31, 2021, was Clemson Corp. stock-$19,000; Buffaloes Co.stock-$20,350. 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. Loss on Sale of Investments Equity Investments (c) Fair Value Adjustment Fair Value $18,900 9,200 20,460 $48,560 (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.) Unrealized Gain (Loss) $(1,000) (1,100) 560 (1,540 ) Unrealized Holding Gain or Loss -Income 0 $(1,540 ) Debit 100 Credit On December 21, 2020, Waterway Company provided you with the following information regarding its equity investments. Investments (Trading) Clemson Corp. stock Colorado Co. stock Buffaloes Co. stock Total of portfolio Previous fair value adjustment balance Fair value adjustment-Cr. December 31, 2020 Cost $19,900 10,300 (b) 19,900 $50,100 No. Account Titles and Explanation (a) Unrealized Holding Gain or Loss - Equity Fair Value Adjustment Cash During 2021, Colorado Co. stock was sold for $9.750. The fair value of the stock on December 31, 2021, was Clemson Corp. stock-$19,000; Buffaloes Co.stock-$20,350. 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. Loss on Sale of Investments Equity Investments (c) Fair Value Adjustment Fair Value $18,900 9,200 20,460 $48,560 (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.) Unrealized Gain (Loss) $(1,000) (1,100) 560 (1,540 ) Unrealized Holding Gain or Loss -Income 0 $(1,540 ) Debit 100 Credit

Answer rating: 100% (QA)

Answer Explanation Unrealised Holding Gain Faix Value Adjustment ou Lou lub cash Loss on sale of I... View the full answer