Prepare the adjusting entry at December 31, 2017, to report the securities at fa

Question

Prepare the adjusting entry at December 31, 2017, to report the securities at fair value.

Show the balance sheet and income statement presentation at December 31, 2017, after adjustment to fair value.

Prepare the adjusting entry at December 31, 2017, to report the securities at fair value.

Show the statement presentation at December 31, 2017, after adjustment to fair value.

At December 31, 2017, the trading securities for Tamarisk, Inc. are as follows.
Security Cost Fair Value A $17,700 $15,500 B 12,900 14,300 C 22,600 18,100    Total $53,200 $47,900

Explanation / Answer

1)

2)

Journal Entry Unrealized loss-income ($53,200 - $47,900) $5,300                       Fair value Adjustment-Trading $5,300 Balance Sheet Current Assets Short term investmetns, at fair value $47,900 Income Statement Other expenses and losses unrealized loss on trading securities $5,300

2)

Journal Entry Unrealized Gain or Loss-Equity ($59,100 - $48,500) $10,600                       Fair value Adjustment-(Non Trading) $10,600 Balance Sheet Investments Investments in stock of less than 20% owned companies, at fair value $48,500 Stockholders’ equity Less: Unrealized loss on non-trading securities -$10,600

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