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Question 2 On December 21, 2020, Vaughn Company provided you with the following information regarding its equity investments. December 31, 2020 Fair Unrealized Gain Investments (Trading) Cost Value (Loss) Clemson Corp. stock $18,500 ৪,000 $19,500 $(1,000 ) Colorado Co. stock 9,100 (1,100 ) Buffaloes Co. stock 19,500 20,140 640 Total of portfolio $48,100 $46,640 (1,460 ) Previous fair value adjustment balance Fair value adjustment-Cr. $(1,460 ) During 2021, Colorado Co. stock was sold for $8,480. The fair value of the stock on December 31, 2021, was Clemson Corp. stock-$18,600; Buffaloes Co. stock-$20,040. None of the equity investments result in significant influence. (a yourmar eE (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.

Question 2 On December 21, 2020, Vaughn Company provided you with the following information regarding its equity investments. December 31, 2020 Fair Unrealized Gain Investments (Trading) Cost Value (Loss) Clemson Corp. stock $18,500 ৪,000 $19,500 $(1,000 ) Colorado Co. stock 9,100 (1,100 ) Buffaloes Co. stock 19,500 20,140 640 Total of portfolio $48,100 $46,640 (1,460 ) Previous fair value adjustment balance Fair value adjustment-Cr. $(1,460 ) During 2021, Colorado Co. stock was sold for $8,480. The fair value of the stock on December 31, 2021, was Clemson Corp. stock-$18,600; Buffaloes Co. stock-$20,040. None of the equity investments result in significant influence. (a yourmar eE (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.

FINANCIAL ACCOUNTING
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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Please help solve (b). 

**Question 2** On December 21, 2020, Vaughn Company provided you with the following information regarding its equity investments. | December 31, 2020 | | | | |-----------------------------|---------------------|------------------|-----------------------------| | **Investments (Trading)** | **Cost** | **Fair Value** | **Unrealized Gain (Loss)** | | Clemson Corp. stock | $19,500 | $18,500 | $(1,000) | | Colorado Co. stock | 9,100 | 8,000 | (1,100) | | Buffaloes Co. stock | 19,500 | 20,140 | 640 | | **Total of portfolio** | **$48,100** | **$46,640** | **(1,460)** | | | | | | | Previous fair value adjustment balance | | | 0 | | Fair value adjustment—Cr. | | | $(1,460) | During 2021, Colorado Co. stock was sold for $8,480. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$18,600; Buffaloes Co. stock—$20,040. None of the equity investments result in significant influence. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.
Transcribed Image Text:**Question 2** On December 21, 2020, Vaughn Company provided you with the following information regarding its equity investments. | December 31, 2020 | | | | |-----------------------------|---------------------|------------------|-----------------------------| | **Investments (Trading)** | **Cost** | **Fair Value** | **Unrealized Gain (Loss)** | | Clemson Corp. stock | $19,500 | $18,500 | $(1,000) | | Colorado Co. stock | 9,100 | 8,000 | (1,100) | | Buffaloes Co. stock | 19,500 | 20,140 | 640 | | **Total of portfolio** | **$48,100** | **$46,640** | **(1,460)** | | | | | | | Previous fair value adjustment balance | | | 0 | | Fair value adjustment—Cr. | | | $(1,460) | During 2021, Colorado Co. stock was sold for $8,480. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$18,600; Buffaloes Co. stock—$20,040. None of the equity investments result in significant influence. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.
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