Homework SourseUttinger Company has the following data at December 31 2017
Uttinger Company has the following data at December 31, 2017.
Securities
Cost
Fair Value
The available-for-sale securities are held as a long-term investment.
Indicate the statement presentation of each class of securities.
Indicate the related unrealized gain (loss) accounts.
| Securities | Cost | Fair Value | ||
| Trading | $120,000 | $126,000 | ||
| Available-for-sale | 100,000 | 96,000 |
Solution
SOLUTION:
Adjusting entries
Debit
Credit
Fair value adjustment trading
$6,000
Unrealized gain (Income)
$6,000
Unrealized gain or loss-Equity
$4,000
Fair value adjustment
$4,000
Balance sheet Dec 31, 2017
Current assets
Trading securities
$126000
Balance sheet Dec 31, 2017
Investment-Long term
Stockholders’ equity
Available for sale securities
$126000
Retained earnings
Minus : unrealized loss on available for sale $4,000
| Debit | Credit | |
| Fair value adjustment trading | $6,000 | |
| Unrealized gain (Income) | $6,000 | |
| Unrealized gain or loss-Equity | $4,000 | |
| Fair value adjustment | $4,000 |
