McElroy Company has the following portfolio of investment securities at September 30, 2012, its last reporting date. Trading Securities Fair Value Cost Horton, Inc. common (5,000 shares) Monty, Inc. preferred (3,500 shares) Oakwood Corp. common (1,000 shares) 180,000 $215,000 $200,000 133,000 140,000 179,000 On October 10, 2012, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2012. The December 31, 2012, fair values were: Monty $106,000, Patriot $132,000 and the Oakwood common $193,000. All the securities are classified as trading. Instructions a. Prepare the journal entries to record the sale, purchase, and audjusting entrics related to the trading securities in the last quarter of 2012. b. How would the entries in part (a) change if the securities were classified as available-for-sale?

McElroy Company has the following portfolio of investment securities at September 30, 2012, its last reporting date. Trading Securities Fair Value Cost Horton, Inc. common (5,000 shares) Monty, Inc. preferred (3,500 shares) Oakwood Corp. common (1,000 shares) 180,000 $215,000 $200,000 133,000 140,000 179,000 On October 10, 2012, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2012. The December 31, 2012, fair values were: Monty $106,000, Patriot $132,000 and the Oakwood common $193,000. All the securities are classified as trading. Instructions a. Prepare the journal entries to record the sale, purchase, and audjusting entrics related to the trading securities in the last quarter of 2012. b. How would the entries in part (a) change if the securities were classified as available-for-sale?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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