Zurich Company _trading securities

$11.00

Description

On December 21, 2012, Zurich Company provided you
with the following information regarding its trading securities.

December 31, 2012

Investments (Trading)

Cost

Fair Value

Unrealized Gain (Loss)

Stargate Corp. stock

$20,320

$19,320

$(1,000

)

Carolina Co. stock

10,940

9,940

(1,000

)

Vectorman Co. stock

20,320

21,010

690

Total of portfolio

$51,580

$50,270

(1,310

)

Previous fair value adjustment balance

0

Fair value adjustment—Cr.

$(1,310

)

During 2013, Carolina Company stock was sold for
$10,490. The fair value of the stock on December 31, 2013, was: Stargate Corp.
stock—$19,600; Vectorman Co. stock—$20,830.

(a)

Prepare the adjusting journal entry needed on December 31, 2012.

(b)

Prepare the journal entry to record the sale of the Carolina Company
stock during 2013.

(c)

Prepare the adjusting journal entry needed on December 31, 2013.

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