Metlock Corporation made the following cash purchases of securities during 2020, which is the first year in which Metlock invested in securities.1. On January 15, purchased 11,600 shares of Sanchez Company’s common stock at $33.50 per share plus commission $2,304.2. On April 1, purchased 5,800 shares of Vicario Co.’s common stock at $52 per share plus commission $3,902.3. On September 10, purchased 8,120 shares of WTA Co.’s preferred stock at $26.50 per share plus commission $5,692.On May 20, 2020, Metlock sold 4,524 shares of Sanchez Company’s common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $4,466. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Metlock told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.PLEASE HELP STATED AS WRONG. LIST OF ACCOUNTS AS FOLLOWAccumulated Other Comprehensive LossAllowance for Doubtful AccountsAllowance to Reduce Inventory to MarketBad Debt ExpenseBonds PayableCashCall OptionCommon StockCost of Goods SoldDebt InvestmentsDividend RevenueDividend ReceivableEquity InvestmentsFair Value AdjustmentFutures ContractGain on Sale of InvestmentsGain on Settlement of Call OptionGain on Settlement of Put OptionInterest ExpenseInterest ReceivableInterest RevenueInventoryInvestment IncomeLoss on ImpairmentLoss on Sale of InvestmentsLoss on Settlement of Call OptionLoss on Settlement of Put OptionNo EntryNotes PayablePaid-in Capital in Excess of Par - Common StockPut OptionRecovery of Loss from ImpairmentRetained EarningsRevenue from InvestmentSales RevenueSwap ContractUnrealized Holding Gain or Loss - EquityUnrealized Holding Gain or Loss - Income Your answer is partially correct.Compute the unrealized gains or losses. (Round answer to O decimal places, e.g. 2,500.)Unrealized Losses$(6185) iPrepare the adjusting entries for Metlock on December 31, 2020. (Round answers to 0 decimal places, eg. 2,500. Credit account titlesare automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts.)DateAccount Titles and ExplanationDebitCreditDec. 31,Unrealized Holding Gain or Loss - Equity61852020Fair Value Adjustment6185

The question is based on the concept of Financial Accounting.

Answered: Metlock Corporation made the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Metlock Corporation made the following cash purchases of securities during 2020, which is the first year in which Metlock invested in securities.

1.		On January 15, purchased 11,600 shares of Sanchez Company’s common stock at $33.50 per share plus commission $2,304.
2.		On April 1, purchased 5,800 shares of Vicario Co.’s common stock at $52 per share plus commission $3,902.
3.		On September 10, purchased 8,120 shares of WTA Co.’s preferred stock at $26.50 per share plus commission $5,692.

On May 20, 2020, Metlock sold 4,524 shares of Sanchez Company’s common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $4,466. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Metlock told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.

PLEASE HELP STATED AS WRONG.

LIST OF ACCOUNTS AS FOLLOW

Accumulated Other Comprehensive Loss
Allowance for Doubtful Accounts
Allowance to Reduce Inventory to Market
Bad Debt Expense
Bonds Payable
Cash
Call Option
Common Stock
Cost of Goods Sold
Debt Investments
Dividend Revenue
Dividend Receivable
Equity Investments
Fair Value Adjustment
Futures Contract
Gain on Sale of Investments
Gain on Settlement of Call Option
Gain on Settlement of Put Option
Interest Expense
Interest Receivable
Interest Revenue
Inventory
Investment Income
Loss on Impairment
Loss on Sale of Investments
Loss on Settlement of Call Option
Loss on Settlement of Put Option
No Entry
Notes Payable
Paid-in Capital in Excess of Par - Common Stock
Put Option
Recovery of Loss from Impairment
Retained Earnings
Revenue from Investment
Sales Revenue
Swap Contract
Unrealized Holding Gain or Loss - Equity
Unrealized Holding Gain or Loss - Income

Your answer is partially correct.
Compute the unrealized gains or losses. (Round answer to O decimal places, e.g. 2,500.)
Unrealized Losses
$
(6185) i
Prepare the adjusting entries for Metlock on December 31, 2020. (Round answers to 0 decimal places, eg. 2,500. Credit account titles
are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles
and enter O for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31,
Unrealized Holding Gain or Loss - Equity
6185
2020
Fair Value Adjustment
6185

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