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Homework answers / question archive / Trading equity securities

Trading equity securities

Business

Trading equity securities.

Gordon Company has the following securities in its portfolio of trading equity securities on December 31, 2003:

Cost Fair Value

5,000 shares of Milner Corp., Common $160,000 $139,000

10,000 shares of Eddy, Common 182,000 190,000

$342,000 $329,000

All of the securities had been purchased in 2003. In 2004, Gordon completed the following securities transactions:

March 1 Sold 5,000 shares of Milner Corp., Common @ $31 less fees of $1,500.

April 1 Bought 600 shares of Yount Stores, Common @ $50 plus fees of $550.

The Gordon Company portfolio of trading equity securities appeared as follows on December 31, 2004:

Cost Fair Value

10,000 shares of Eddy, Common $182,000 $195,500

600 shares of Yount Stores, Common 30,550 25,500

$212,550 $221,000

Instructions

Prepare the general journal entries for Gordon Company for:

(a) the 2003 adjusting entry.

(b) the sale of the Milner Corp. stock.

(c) the purchase of the Yount Stores' stock.

(d) the 2004 adjusting entry.

Option 1

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