Adjust FVA at Sale and Year-End At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows. Investment Security Cost Fair Value Unrealized Holding Gain (Loss) Badger Common Stock (1,000 shares) $112,000 $110,600 $(1,400) Spartan Common Stock (1,600 shares) 140,000 142,800 2,800 Wildcat Common Stock (500 shares) 70,000 65,800 (4,200) Total $322,000 $319,200 $(2,800) On June 1, 2020, Athletes Inc. sold 1,120 shares of Spartan stock for $33 per share and 280 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 1,120 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $117,600; Spartan common stock, $100,800; Wildcat common stock, $58,240; and Gopher common stock, $40,320. a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020. Prior to recording the sale, update the investments to fair value. Eliminate the associated Fair Value Adjustment balances upon sale of the investments. b. Record the purchase of Gopher common stock on August 1, 2020. c. Prepare any adjusting entry needed on December 31, 2020. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Do not round until your final answers. Round your final answers to the nearest whole dolla

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

QUESTION 11

Adjust FVA at Sale and Year-End

At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.

Investment Security	Cost	Fair Value	Unrealized Holding Gain (Loss)
Badger Common Stock (1,000 shares)	$112,000	$110,600	$(1,400)
Spartan Common Stock (1,600 shares)	140,000	142,800	2,800
Wildcat Common Stock (500 shares)	70,000	65,800	(4,200)
Total	$322,000	$319,200	$(2,800)

On June 1, 2020, Athletes Inc. sold 1,120 shares of Spartan stock for $33 per share and 280 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 1,120 shares of Gopher common stock for $35 per share on August 1, 2020. The fair value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $117,600; Spartan common stock, $100,800; Wildcat common stock, $58,240; and Gopher common stock, $40,320.

a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020. Prior to recording the sale, update the investments to fair value. Eliminate the associated Fair Value Adjustment balances upon sale of the investments.
b. Record the purchase of Gopher common stock on August 1, 2020.
c. Prepare any adjusting entry needed on December 31, 2020.

Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Do not round until your final answers. Round your final answers to the nearest whole dollar.

	Date	Account Name	Dr.	Cr.
a.	June 1, 2020


	June 1, 2020



	June 1, 2020


	June 1, 2020



b.	Aug. 1, 2020

c.	Dec. 31, 2020

Please answer all parts of the question.

Adjust FVA at Sale and Year-End
At December 31, 2019, the portfolio of investments in equity securities measured at FV-NI held by Athletes Inc. is as follows.
Unrealized
Fair
Holding
Investment Security
Cost
Value
Gain (Loss)
Badger Common Stock (1,000 shares) $112,000 $110,600
$(1,400)
Spartan Common Stock (1,600 shares)
140,000
142,800
2,800
Wildcat Common Stock (500 shares)
70,000
65,800
(4,200)
Total
$322,000 $319,200
$(2,800)
On June 1, 2020, Athletes Inc. sold 1,120 shares of Spartan stock for $33 per share and 280 shares of Wildcat stock for $55 per share. Athletes Inc. purchased 1,120 shares of Gopher common stock for $35 per share on August 1, 2020. The fair
value of the remaining stock held on December 31, 2020, is as follows: Badger common stock, $117,600; Spartan common stock, $100,800; Wildcat common stock, $58,240; and Gopher common stock, $40,320.
a. Prepare the entry for the sale of Spartan and Wildcat common stock on June 1, 2020. Prior to recording the sale, update the investments to fair value. Eliminate the associated Fair Value Adjustment balances upon sale of the investments.
b. Record the purchase of Gopher common stock on August 1, 2020.
c. Prepare any adjusting entry needed on December 31, 2020.
• Note: List multiple debits or credits (when applicable) in alphabetical order.
• Note: Do not round until your final answers. Round your final answers to the nearest whole dollar.
Date
Account Name
Dr.
Cr.
а.
June 1, 2020
To adjust Spartan investment to fair value.
June 1, 2020
To record sale of Spartan investment.
June 1, 2020
To adjust Wildcat investment to fair value.
June 1, 2020
To record sale of Wildcat investment.
b.
Aug. 1, 2020
C.
Dec. 31, 2020
Please answer all parts of the question.
o o o
o o o
O o O

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions