Gruden Bancorp Inc. purchased a portfolio of trading securities during $20$Y$3,$ its first year of operations. The cost and fair value of this portfolio on December $31,20$Y$3,$ are as follows:

$1$

Issuing Company

Cost

Fair Value

$2$

Griffin Inc.

$$40,000\mathrm{.}00$

$$44,800\mathrm{.}00$

$3$

Luck Company

$37,500\mathrm{.}00$

$33,750\mathrm{.}00$

$4$

Wilson Company

$40,000\mathrm{.}00$

$37,000\mathrm{.}00$

$5$

Total

$$117,500\mathrm{.}00$

$$115,550\mathrm{.}00$

On May $10,20$Y$4,$ Gruden Bancorp Inc. purchased trading securities of Carroll Inc. for $$34,900.$

Required:

Journalize the entries to record the following:

a$.$ The adjusting entry for the portfolio of trading securities on December $31,20$Y$3.*$

b$.$ The May $10,20$Y$4,$ purchase of Carroll Inc. securities$.*$

c$.$ The adjusting entry for the portfolio of trading securities on December $31,20$Y$4.$ Assume that except for the purchase of Carroll Inc. securities there were no other transactions involving trading securities in $20$Y$4.$ In addition, assume that the fair value of the portfolio of trading securities on December $31,20$Y$4,$ is $$175,000.*$

d$.$ What amount should be reported for trading investments on the December $31,20$Y$4,$ balance sheet?

$*$Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Answer rating: 100% (QA)

To journalize the entries for the transactions described well follow the instructions provided a Adj... View the full answer