Business, 22.09.2020 01:01 cramirezorozco392

On December 21, 2020, Sheridan Company provided you with the following information regarding its equity investments. December 31, 2020
Investments (Trading) Cost Fair Value Unrealized Gain (Loss)
Clemson Corp. stock $18,700 $17,600 $(1,100 )
Colorado Co. stock 9,200 8,300 (900 )
Buffaloes Co. stock 18,700 19,240 540
Total of portfolio $46,600 $45,140 (1,460 )
Previous fair value adjustment balance 0
Fair value adjustment—Cr. $(1,460 )

During 2021, Colorado Co. stock was sold for $8,770. The fair value of the stock on December 31, 2021, was Clemson Corp. stock—$17,690; Buffaloes Co. stock—$19,130. None of the equity investments result in significant influence.

Required:
a. Prepare the adjusting journal entry needed on December 31, 2020.
b. Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.
c. Prepare the adjusting journal entry needed on December 31, 2021.

Answers: 3

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On December 21, 2020, Sheridan Company provided you with the following information regarding its equ...