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Adjusting entries for common stock and preferred stock.
Asked Apr 19, 2008, 05:22 PM
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1 Answer This is a question off my problem. I am hoping that someone can help. The corporation has stocks of preferred stock with a number of shares of 400 that cost $6,000 and common stock of shares for 300 that cost $9,000. The common stock has purchases on march 30 of 25 shares for the cost of $950 and again purchased shares on Sept. 9th of 75 shares for $3,000. At the end of Dec. 31, 2003 the market value of shares are $14 per preferred stock and $25 for the common stock. I did the journal entries but on Dec.31,2003 it ask to prepare adjusting entries that might be necessary to the trader profile. Can any one help me with the adjusting entries? I have to have this done by Sunday. This is where I am lost.  |
1 Answer
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| Accounting treatment for investments depends on the intent of holding the stocks. Is there any indication of whether the shareholder wants to trade stocks frequently or wants to hold as long term investment? That determines what method you should use, cost method, equity method, and such. | ||||
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