On December 31, 2021, the end of its first year of operations, Turnball Associates owned the following securities, that are held as a long-term investments. The securities are not held for influence or control of the investee.

On December 31, 2021, the total fair value of the securities was equal to its cost. In 2022, the following transactions occurred.

At December 31, the fair values per share of the common stocks were: Gehring Co. $32, Wooderson Co. $8, and Kitselton Co. $18. These investments should be classified as long-term.

Instructions
a. Journalize the 2022 transactions and post to the account Stock Investments. (Use the T-account form.)
b. Prepare the adjusting entry at December 31, 2022, to show the securities at fair value.
c. Show the balance sheet presentation of the investments and the equity section of the balance sheet at December 31, 2022. At this date, Turnball Associates has common stock $1,500,000 and retained earnings $1,000,000.

Transcribed Image Text:

Common Stock Gehring Co. Wooderson Co. Kitselton Co. Shares 2,000 5,000 1,500 Cost $60,000 45,000 30,000