Explainanation on how the professor find these numbers for the solution. I provided the solution . I just need the information
1.Armonico Capital Partners, Ltd acquired the following equity investments at the beginning of 2017 to be held in a trading portfolio:
Description
Anderson Brothers
Daimler Company
Number of share$15,500$20,000
Market price per shareX $25X $18
Share acquisition price$387,500$360,000
Share prices at the end of years 2017 and 2018 are presented below:
Fair Value
Anderson Brothers
Daimler Company
End of year 2017
$19
$22
End of year 2018
$23
$28
Required
a. Prepare the journal entry to record the acquisition of the investments
b. Prepare the journal entry to record the end of year 2017 adjusting entry
c. Assume that Armonico sells 15,000 Daimler Company shares for $16 per share at the beginning of 2018. Prepare the journal entry required to record the sale. Armonico does not correct the fair value adjustment account at this time.
d. Prepare the journal entry to record the end of year 2018 adjusting entry
Solution to Problem 1:
a.
Dr Equity Investments – Trading
747500
Cr Cash
747500
b.
Dr Unrealized gain/ loss on Equity Investments – Income
13000
Cr Fair Value Adjustment – Equity Investments
13000
c.
Dr Cash
240000
Dr Loss on Sale of Equity Investments
30000
cr Equity Investments – Trading
270000
d.
Dr Fair Value Adjustment – Equity Investments
32000
Cr Unrealized gain/ loss on Equity Investments – Income
32000
AndersoDaimler
1550020000
19 22
Fair Value @ end of Year 129450044000073450
155005000
2328
Fair Value @ end of Year 2356500140000496500
155005000
2518
Cost @ end of Year 238750090000 477500
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