Question

Prk Company has the following securities in its portfolio of trading equity investments on December 31, 2018:

	Cost	Fair Value
6,000 ordinary shares of Kel Corp.	$186,000	$166,800
12,000 ordinary shares of Ret	218,400	228,000
	$404,400	$394,800

All of the investments had been purchased in 2018. In 2019, Prk completed the following investments transactions:

May 31      Sold 6,000 ordinary shares of Kel Corp., @ $32 with commissions, taxes, and fees of $2,000.

July 20      Bought 720 ordinary shares of Yel Stores, @ $44 plus direct fees of $1,380.

The Prk Company portfolio of trading equity investments appeared as follows on December 31, 2019:

	Cost	Fair Value
10,000 ordinary shares of Gant	$218,400	$234,600
720 ordinary shares of Yel Stores	33,060	30,600
	$251,460	$265,200

Prepare the general journal entries to record the adjustment (and/or closing) in the end of 2018, sale of the Kel Corp. shares, and purchase of the Yel Stores’ shares. Show clear computations if any gain or loss is involved.

Answer 1