Answered: Number of Shares Name Cost Arden…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Last Unguaranteed Financial Inc. purchased the following trading securities during Year 1, its first year of operations:

Please see the attachment for details:

The market price per share for the trading security portfolio on December 31, Year 1, was as follows:

Please see the attachment for details:

a. Provide the journal entry to adjust the trading security portfolio to fair value on December 31, Year 1.
b. Assume that the market prices of the portfolio were the same on December 31, Year 2,as they were on December 31, Year 1. What would be the journal entry to adjust the portfolio to fair value?

Number of Shares
Name
Cost
Arden Enterprises Inc.
$150,000
5,000
French Broad Industries Inc.
2,750
66,000
Pisgah Construction Inc.
1,600
104,000
Total
$320,000

Market Price per Share,
Dec. 31, Year 1
Arden Enterprises Inc.
$34
French Broad Industries Inc.
26
Pisgah Construction Inc.
60

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