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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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On its December 31, 2018, balance sheet, Fay Company reported equity investments at a market value of $183,000. There was no change during 2019 in the composition of Fay’s portfolio of marketable equity securities. Pertinent data are as follows:

Chapter 13, Problem 7MC, On its December 31, 2018, balance sheet, Fay Company reported equity investments at a market value

What amount of loss on these securities should be included in Fay’s income statement for the year ended December 31, 2019?

  1. a. $0
  2. b. $1,500
  3. c. $2,000
  4. d. $3,500

To determine

Identify the amount of loss on these securities that should be included in the Company F’s income statement for the year ended December 31, 2019.

Explanation

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Identify the amount of loss on these securities that should be included in the Company F’s income statement for the year ended December 31, 2019.

Amount of loss=(Total market value at 12/31/2018

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