During Year 1, Walters Company purchased 6,000 shares of Company A common stock for $25 per share
Question:
During Year 1, Walters Company purchased 6,000 shares of Company A common stock for $25 per share and 10,000 shares of Company B common stock for $32 per share. These investments are classified as available-for-sale securities. At December 31, Year 1, Walters Company appropriately recorded a $95,000 debit to Market Adjustment—Available-for-Sale Securities. On March 23, Year 2, the 6,000 shares of Company A common stock were sold for $41 per share. The fair value of the Company B shares on December 31, Year 2, was $38 per share.
(1) Prepare all journal entries needed in Year 2 related to these securities.
(2) Compute the total increase in economic value generated by Walters’ stock portfolio during Year 2.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
Step by Step Answer:
1 Mar 23Cash 6000 41 246000 Realized Gain on AvailableforSale Securities ...View the full answer
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
