Gilder Company has the following securities in its portfolio

Gilder Company has the following securities in its portfolio of trading equity securities on 12/31/17:

                                                                            Cost            Fair Value

              5,000 shares of Diamond Corp.           $146,000         $126,500

            10,000 shares of Culver Co.                    180,000           185,000

              2,000 shares of Barbee Co.                    52,000             52,600

                                                                        $378,000         $364,100

All of the securities had been purchased in 2017.

In 2018, Gilder completed the following securities transactions:

    3/1 Sold 5,000 shares of Diamond Corp. @ $26 less fees of $1,500.

    7/1 Bought 600 shares of Vogle Stores @ $42 plus fees of $550.

The Gilder Company portfolio of trading equity securities appeared at the end of 2018:

                                                                            Cost            Fair Value

            10,000 shares of Culver Co.                  $180,000         $198,500

              2,000 shares of Barbee Co.                    52,000             53,000

                 600 shares of Vogle Stores                  25,750             23,800

                                                                        $257,750         $275,300

Required:  Prepare the general journal entries for Gilder Company for:

the 2017 adjusting entry.

the sale of the Diamond Corp. stock and the purchase of the Vogle Stores stock

the 12/31/18 adjusting entry.   

Show all work and formulas

Solution

Date Particulars Debit Credit a) 31-12-2017 Unrealized Holding gain or Loss (Income) 13900 Securities Fair Value Adjustment 13900 (378000-364100) b) 01-03-2018 Cash(5000*$26- 1500) 128500 Loss on sales of securities 1500 Trading securities 130000 c) 01-07-2018 Trading Securities 25750 Cash(600*$42 +550) 25750 d) 31-12-2018 Securities Fair Value Adjustment 17550 Unrealized Holding gain or Loss (Income) 17550