Zippydah Company has the following data at December 31, 2012.
The available-for-sale securities are held as a long-term investment.
(a) Prepare the adjusting entries to report 1. Trading securities at fair value and 2. Available-for-sale securities at fair value.
Explanation
(a) (1) Market Adjustment-Trading ($125,370 – $119,010) = $6,360
(a) (2) Unrealized Gain or Loss-Equity ($103,870 – $91,090) = $12,780
Securities
|
Cost
|
Fair Value
| ||
Trading | $119,010 | $125,370 | ||
Available-for-sale | 103,870 | 91,090 |
The available-for-sale securities are held as a long-term investment.
(a) Prepare the adjusting entries to report 1. Trading securities at fair value and 2. Available-for-sale securities at fair value.
Explanation
(a) (1) Market Adjustment-Trading ($125,370 – $119,010) = $6,360
(a) (2) Unrealized Gain or Loss-Equity ($103,870 – $91,090) = $12,780
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