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E17-15

(Equity InvestmentsTrading) Kenseth Company has the followingsecurities in its trading port- folio of securities on December 31,2013.

Investments(Trading) Cost Fair Value

1,500 shares of Gordon, Inc., Common $73,500 $ 69,000

5,000 shares of Wallace Corp.,Common 180,000 175,000

400 shares of Martin, Inc.,Preferred 60,000 61,600

$313,500 $305,600

All of the securities were purchased in 2013.

In 2014, Kenseth completed the following securitiestransactions.

March 1Sold the 1,500 shares ofGordon, Inc., Common, @ $45 less fees of $1,200

April 1 Bought 700 sharesof Earnhart Corp., Common, @ $75 plus fees of $1,300

Kenseth Companys portfolio of trading securities appeared asfollows on December 31, 2014

Investments(Trading) Cost Cost Fair Value

5,000 shares of Wallace Corp.,Common $180,000 $175,000

700 shares of Earnhart Corp.Common 53,800 $50,400

400 shares of Martin, Inc.Preferred 60,000 $58,000

293,800 283,400

Instructions

Prepare the general journal entries for Kenseth Company for:

(a)The 2013 adjusting entry.

(b) The sale of the Gordon stock.

(c)The purchase of the Earnhart stock.

(d) The 2014 adjusting entry for the trading portfolio

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Elin Hessel
Elin HesselLv2
28 Sep 2019

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