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Asked by Gabrielle Richard on Jul 14, 2024

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Following are data for the trading securities held by Lindy Company as of December 31: Following are data for the trading securities held by Lindy Company as of December 31: (a) Complete the table above to find the total cost and fair value for the company's trading securities portfolio.(b) Calculate and record the required December 31 adjustment.(c) Explain how the adjustment from step (b) is reported on Lindy's financial statements. (a) Complete the table above to find the total cost and fair value for the company's trading securities portfolio.(b) Calculate and record the required December 31 adjustment.(c) Explain how the adjustment from step (b) is reported on Lindy's financial statements.

Trading Securities

Financial instruments that are purchased by a company not for long-term investment but rather for the purpose of earning a return through short-term price fluctuations.

Fair Value

An estimate of the price at which an asset or liability would be traded in a fair transaction between willing parties.

Financial Statements

Descriptions giving insight into a business's financial situation, covering the balance sheet, income statement, and cash flow statement.

  • Comprehend the treatment and reporting of trading securities on financial statements.
  • Know how to record adjustments for investments to fair value and their impact on financial statements.
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TN
Tammi NarehoodJul 16, 2024
Final Answer :
(b)Unrealized Loss on Trading Investments 1,372 Valuation Allowance for Trading Investments 1,372 $45,595 - $44,223 = $1,372 unrealized loss (c) The unrealized loss will be shown as an Other Expense on the income statement and the valuation allowance will be shown as a reduction of the value of the trading investment portfolio (at cost) in the assets section of the balance sheet. (b)Unrealized Loss on Trading Investments
1,372
Valuation Allowance for Trading Investments
1,372
$45,595 - $44,223 = $1,372 unrealized loss
(c) The unrealized loss will be shown as an "Other Expense" on the income statement and the valuation allowance will be shown as a reduction of the value of the trading investment portfolio (at cost) in the assets section of the balance sheet.

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