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securities were purchased in 2014 1 3000 shares of Anderson Co common stock which cost $58500 2 10000 shares of Munter Ltd common stock which cost

securities were purchased in 2014): (1) 3,000 shares of Anderson Co. common stock which cost $58,500, (2) 10,000 shares of Munter Ltd. common stock which cost

$580,000, and (3) 6,000 sha es of King Company efer ed stock which cost $255,000. The Fair alue Adjust-

ment account shows a c edit of $10,100 at the end of 2014.

In 2015, Parnevik completed the following securities transactions.

1. On January 15, sold 3,000 shares of Anderson’s common stock at $22 per share less fees of $2,150.

2. On April 17, pu chased 1,000 sha es of Castle’s common stock at $33.50 per sha plus fees of $1,980.

On December 31, 2015, the market prices per share of these securities were Munter $61, King $40, and Castle $29. In addition, the accounting supervisor of Parnevik told you that, even though all these securi- ties have readily determinable fair values, Parnevik will not actively trade these securities because the top management intends to hold them for more than one year.

 

Instructions

(a) epa e the entry for the security sale on January 15, 2015.

(b) epa e the journal entry to eco d the security pu chase on April 17, 2015.

(c) Compute the un ealized gains or losses and epa the adjusting entry for Parnevik on December

31, 2015.

(d) How should the un ealized gains or losses be eported on Parnevik’s balance sheet?

Jun 18 2020 View more View Less

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