journal entry for sale of investment?
Asked Oct 31, 2011, 12:42 PM
On November 11, 2011, Wadsworth Company purchased twenty shares of ZZZ for $8 per
share. Wadsworth held the investment for the remainder of 20II, and as of December 31, the
per-share market value of ZZZ had risen to $10. During 2012, Wadsworth sold ten shares of
ZZZ for $9 each, and at the end of 2012, the per-share market price of the remaining tens was $12. During 2013, the remaining shares of ZZZ were sold for $14 each. Assume
that Wadsworth held no other equity investments during this time.
a. Complete the following chart. The first column assumes that the investment was classi¬∑
fied as trading securities; the second column assumes that the investment was classified
as available-for-sale securities.
trading available for sale
12/31/11 balance sheet investment value
12/31/12 balance sheet investment value
Total income ('11 '12 '13)
b. Comment on the differences.