eft01800 Muse Mohamed Attempt 1 Question 2 2 points On Septe

eft:0:18:00 Muse Mohamed: Attempt 1 Question 2 (2 points) On September 19,2013, Fowler Corporation invested $800,000 in common stock of Norton Industries as short-tertrading securities. The fair value of this investment was $775,000 at December 31, 2013. In financial statements and records prepared on December 31, 2013, Fowler Corporation reports Stock Investments at $800,000 cost, with footnote disclosure of the fair value of $775,000. under current assets at $775,000 fair value in the balance sheet, and a $25,000 Unrealized Loss reported under Other Expenses and losses in the income statement. at $800,000 cost in the balance sheet, and a $25,000 debit to Fair Value Adjustment- Trading in the adjusting entry. at $800,000 cost, and a $25,000 Unrealized Loss included in the balance sheet as part of stockholders\' equity Save

Solution

Short-term investments are initially recorded at cost . However, the value of these items may fluctuate. Subsequent to initial acquisition, short-term investments are to be reported at their fair value. The fluctuation in value is reported in the income statement.

Fowler corporation reports Stock Investments;

-Under current assets at $ 775,000 fair value in the balance sheet, and a $25,000 Unrealized Loss reported under Other Expenses and Losses in the income statement.