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    Journal entries for sale and purchase of securities

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    E3-22 ...
    Prepare all the necessary journal entries for ...

    E3-23 ...
    (a) Prepare the adjusting entry at ... to reprt the securities at fair value.
    (b) Show the balance sheet and income statement presentation ... after adjustment to fair value

    Please see attachment for complete set of questions.

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    Solution Preview

    All answers and explanations in the attached file in Sheet 1 and Sheet 2
    Journal Entries for Roscoe Cosmetics
    Date Particulars Dr Cr
    Mar 18 Marketable Securities 260,000 20000 Shares purchased at $13
    Cash 260,000

    June 30 Cash 7,500 10% of 75000 would be dividend to
    Dividend Revenue 7,500 Roscoe

    Dec 31 Unrealized Gains 20,000 $1 gain on 20000 sgares is unrealized
    Accumulated Other Comprehensive Income 20,000 the credit goes to Stockholders Equity section

    Journal Entries for Juan Inc
    Date Particulars Dr Cr
    Jan 1 Investment 81,000 This is treated as investment since Juan has
    Cash 81,000 significant influence

    June 15 Cash 10,500 The dividend would not flow through
    Investment 10,500 the income statement

    Dec 31 Investment 24,000 30% of ...

    Solution Summary

    The solution provides journal entries for sale and purchase of securities and the adjustment for fair value