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Problem 1 – Trading equity securities (16 points)

Korman Company has the following securities in its portfolio of
trading equity securities on December 31, 2010:

  Cost Fair Value
5,000 shares of Thomas Corp., Common $155,000 $139,000
10,000 shares of Gant, Common _182,000   190,000
  $337,000 $329,000

All of the securities had been purchased in 2010. In 2011, Korman
completed the following securities transactions:

March 1 – Sold 5,000 shares of Thomas Corp., Common @ $31 less fees
of $1,500.
April 1 – Bought 600 shares of Werth Stores, Common @ $45 plus fees
of $550.

The Korman Company portfolio of trading equity securities appeared
as follows on December 31, 2011:

  Cost Fair Value
10,000 shares of Gant, Common $182,000 $195,500
600 shares of Werth Stores, Common __27,550  _ 25,500
  $209,550 $221,000

Instructions: Prepare the general journal entries for Korman
Company for:

the 2010 adjusting entry.
the sale of the Thomas Corp. stock.
the purchase of the Werth Stores’ stock.
the 2011 adjusting entry.

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