Please help with D calculations. ### Journal Entries for Investment Transactions#### Instructions:- Credit account titles are automatically indented when an amount is entered. Do not indent manually.- If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.#### Transactions:1. **Transaction (a):** - **Account Titles and Explanation:** - Unrealized Holding Gain or Loss - Income - Fair Value Adjustment - **Debit:** - Unrealized Holding Gain or Loss - Income: $8,000 - **Credit:** - Fair Value Adjustment: $8,0002. **Transaction (b):** - **Account Titles and Explanation:** - Cash - Loss on Sale of Investments - Equity Investments - **Debit:** - Cash: $66,300 - Loss on Sale of Investments: $1,400 - **Credit:** - Equity Investments: $67,7003. **Transaction (c):** - **Account Titles and Explanation:** - Equity Investments - Cash - **Debit:** - Equity Investments: $53,800 - **Credit:** - Cash: $53,8004. **Transaction (d):** - **Account Titles and Explanation:** - Unrealized Holding Gain or Loss - Income - Fair Value Adjustment - **Credit:** - Fair Value Adjustment: No amount enteredThis table outlines journal entries for adjustments and transactions related to investments. Each transaction reflects changes between cash, equity investments, and adjustments related to fair value and losses. **Culver Company Portfolio Overview**As of December 31, 2020, Culver Company holds several securities in its investment portfolio, not accounted for under the equity method. Below is a detailed report of these investments:### Investments on December 31, 2020:- **Gordon, Inc., Common Stock** - Shares: 1,500 - Cost: $67,700 - Fair Value: $63,000- **Wallace Corp., Common Stock** - Shares: 5,000 - Cost: $164,700 - Fair Value: $159,600- **Martin, Inc., Preferred Stock** - Shares: 400 - Cost: $59,300 - Fair Value: $61,100**Total Investment Cost:** $291,700 **Total Fair Value:** $283,700### Securities Transactions in 2021:- **March 1:** Sold 1,500 shares of Gordon, Inc., Common Stock at $45 per share, incurring fees of $1,200.- **April 1:** Purchased 700 shares of Earnhart Corp., Common Stock at $75 per share, with additional fees of $1,300.### Portfolio on December 31, 2021:- **Wallace Corp., Common Stock** - Shares: 5,000 - Cost: $164,700 - Fair Value: $159,600- **Earnhart Corp., Common Stock** - Shares: 700 - Cost: $53,800 - Fair Value: $50,100- **Martin, Inc., Preferred Stock** - Shares: 400 - Cost: $59,300 - Fair Value: $57,500**Total Investment Cost:** $277,800 **Total Fair Value:** $267,200### Required Journal Entries:(a) **2020 Adjusting Entry** (b) **Sale of the Gordon Stock** (c) **Purchase of the Earnhart Stock** (d) **2021 Adjusting Entry for the Trading Portfolio** This detailed breakdown aids in understanding the changes in Culver Company's investment portfolio over the year, including market value adjustments and transactional impacts.

Working Note - Calculation of FMV appreciation and depletion - Particulars FMV Dep / Appr Cost Earnhant Corp 50100 (3700) 53800 Wallace Corp 159600 (5100) 164700 Martin Inc 57500 (1800) 59300 Total (10600) Answer - Part 4 - Journal Entry - (d)Adjusting entries for 31/12/2021 1/1/2021 Unrealised Appreciation Reserve a/c Dr. 1800 Investment in Martin corpor. a/c. 1800 (Recording of appreciation on closing date has been reversed at the beginning of next year) 31/12/2021 Revenue Account a/c Dr. 10600 Provision for depreciation Account 10600 (Recording market value of Earnhart and Martin shares market value depreciated )

Business

Accounting

No. Account Titles and Explanation Debit Credit (a) Unrealized Holding Gain or Loss - Income 8000 Fair Value Adjustment 8000 (b) Cash 66300 Loss on Sale of Investments 1400 Equity Investments 67700 (c) Equity Investments 53800 Cash 53800 (d) Unrealized Holding Gain or Loss - Income Fair Value Adjustmend

No. Account Titles and Explanation Debit Credit (a) Unrealized Holding Gain or Loss - Income 8000 Fair Value Adjustment 8000 (b) Cash 66300 Loss on Sale of Investments 1400 Equity Investments 67700 (c) Equity Investments 53800 Cash 53800 (d) Unrealized Holding Gain or Loss - Income Fair Value Adjustmend

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Please help with D calculations.

### Journal Entries for Investment Transactions

#### Instructions:
- Credit account titles are automatically indented when an amount is entered. Do not indent manually.
- If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.

#### Transactions:

1. **Transaction (a):**
- **Account Titles and Explanation:**
- Unrealized Holding Gain or Loss - Income
- Fair Value Adjustment
- **Debit:**
- Unrealized Holding Gain or Loss - Income: $8,000
- **Credit:**
- Fair Value Adjustment: $8,000

2. **Transaction (b):**
- **Account Titles and Explanation:**
- Cash
- Loss on Sale of Investments
- Equity Investments
- **Debit:**
- Cash: $66,300
- Loss on Sale of Investments: $1,400
- **Credit:**
- Equity Investments: $67,700

3. **Transaction (c):**
- **Account Titles and Explanation:**
- Equity Investments
- Cash
- **Debit:**
- Equity Investments: $53,800
- **Credit:**
- Cash: $53,800

4. **Transaction (d):**
- **Account Titles and Explanation:**
- Unrealized Holding Gain or Loss - Income
- Fair Value Adjustment
- **Credit:**
- Fair Value Adjustment: No amount entered

This table outlines journal entries for adjustments and transactions related to investments. Each transaction reflects changes between cash, equity investments, and adjustments related to fair value and losses.

**Culver Company Portfolio Overview**

As of December 31, 2020, Culver Company holds several securities in its investment portfolio, not accounted for under the equity method. Below is a detailed report of these investments:

### Investments on December 31, 2020:
- **Gordon, Inc., Common Stock**
- Shares: 1,500
- Cost: $67,700
- Fair Value: $63,000

- **Wallace Corp., Common Stock**
- Shares: 5,000
- Cost: $164,700
- Fair Value: $159,600

- **Martin, Inc., Preferred Stock**
- Shares: 400
- Cost: $59,300
- Fair Value: $61,100

**Total Investment Cost:** $291,700
**Total Fair Value:** $283,700

### Securities Transactions in 2021:

- **March 1:** Sold 1,500 shares of Gordon, Inc., Common Stock at $45 per share, incurring fees of $1,200.
- **April 1:** Purchased 700 shares of Earnhart Corp., Common Stock at $75 per share, with additional fees of $1,300.

### Portfolio on December 31, 2021:
- **Wallace Corp., Common Stock**
- Shares: 5,000
- Cost: $164,700
- Fair Value: $159,600

- **Earnhart Corp., Common Stock**
- Shares: 700
- Cost: $53,800
- Fair Value: $50,100

- **Martin, Inc., Preferred Stock**
- Shares: 400
- Cost: $59,300
- Fair Value: $57,500

**Total Investment Cost:** $277,800
**Total Fair Value:** $267,200

### Required Journal Entries:

(a) **2020 Adjusting Entry**
(b) **Sale of the Gordon Stock**
(c) **Purchase of the Earnhart Stock**
(d) **2021 Adjusting Entry for the Trading Portfolio**

This detailed breakdown aids in understanding the changes in Culver Company's investment portfolio over the year, including market value adjustments and transactional impacts.

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