Asked by Autumn Lewis on Jul 30, 2024
Verified
At January 1 2017 the available-for-sale securities portfolio held by Hyde Corporation consisted of the following investments:
1. 2500 shares of Park common stock purchased for $42 per share.
2. 1500 shares of Grace common stock purchased for $60 per share.
At December 31 2017 the market values per share were Park $36 and Grace $68.
Instructions
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31 2017.
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31 2017.
Available-For-Sale Securities
Financial assets that are intended to be sold in the short term, not held to maturity, and are recorded at fair market value.
Market Values
The present rate at which a service or asset is available for purchase or sale on the market.
Adjusting Entry
An accounting entry made in the journals at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.
- Develop and update journal records to indicate investments at their fair value, adhering to the principles of Generally Accepted Accounting Principles.
- Attain proficiency in the techniques for accounting for unrealized gains and losses in securities available for sale.
Verified Answer
3000
Learning Objectives
- Develop and update journal records to indicate investments at their fair value, adhering to the principles of Generally Accepted Accounting Principles.
- Attain proficiency in the techniques for accounting for unrealized gains and losses in securities available for sale.
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