Accounting for Securities
During 2007, the first year of its operations, Profit Industries purchased the following securities:
|
|
|
|
Market Value, |
Market Value, |
|
Security |
Classification |
Cost |
Dec 31, 2007 |
Dec 31, 2008 |
|
A |
Trading |
$18,000 |
$13,000 |
$ 9,000 |
|
B |
Trading |
8,000 |
9,000 |
10,000 |
|
C |
Available for sale |
17,000 |
15,000 |
17,000 |
|
D |
Available for sale |
24,000 |
28,000 |
13,000 |
During 2008, Profit sold one half of security A for $8,000 and one half of security D for $15,000.
Provide the journal entries required to do the following:
1. Adjust the portfolio of securities to its market value at the end of 2007.
2. Record the sale of security A and security D.
3. Adjust the portfolio of securities to its market value at the end of 2008.