Counting Services Inc. has the following portfolio of trading equity securities
ID: 2512809 • Letter: C
Question
Counting Services Inc. has the following portfolio of trading equity securities at 12/31/17. All securities were purchased during 2017.
Symbol # shares Total Cost Market Value
AAPL 1000 $102,000 $107,000
BMX 2000 $47,000 $41,000
GNC 3000 $64,000 $87,000
Total $213,000
• Prepare the adjustment necessary at 12/31/17.
• On February 12, 2018, Counting Services sells 1,000 shares of AAPL for $115,000. Prepare the journal entry.
• The total cost of the two remaining securities is $111,000 and the market value is $130,000 at March 31, 2018. Prepare the adjusting entry.
Explanation / Answer
Symbol
# Shares
Total cost
Market value
AAPL
1,000
$102,000
$107,000
BMX
2,000
$47,000
$41,000
GNC
3,000
$64,000
$87,000
Total
$213,000
$235,000
A
Adjustment entry on 12/31/2017
Unrealised Gain
Debit
Credit
Investment in securities
$22,000
To unrealised gain on securities
($235,000-$213,000)
$22,000
B
On Feb 12, 2018
Cash a/c
$115,000
To Investment in securities
$115,000
C
On March 31, 2018 - Unrealised Gain
Investment in securities
$2,000
To unrealised gain on securities
($41,000+87,000-$130,,000)
$2,000
Symbol
# Shares
Total cost
Market value
AAPL
1,000
$102,000
$107,000
BMX
2,000
$47,000
$41,000
GNC
3,000
$64,000
$87,000
Total
$213,000
$235,000