✔a. $8,500 debit balance B1-35 Fair value adjustment for equity investments; less than 20% ownership Malia Industries owned the following equity investments as of December 31, 2013: Issuing Company Cost $75,000 $0,000 Jolliff Co. 25,000 $150.000 Polich Inc. Shaklee Corporation Fair Value $ 82,500 48,300 27,700 $158,500 Issuing Company Jolliff Co. Polich Inc. Shaklee Corporation Each of the preceding equity investments was purchased in 2013 and is less than 20% ownership of the issuing company. During 20Y4, Malia Industries did not purchase or sell any of the equity securities. The fair value of the equity securities as of December 31, 2014, was as follows: Obj.2 Cost $ 80,000 45,000 24,500 $149,500 a. What was the balance of Valuation Allowance for Equity Investments as of December 31, 20Y3? b. Journalize the adjustment to fair value for the equity investments as of December 31, 2014. c. After the adjustment in (b), what is the balance of Valuation Allowance for Equity Investments? d. Does the change in fair value of the equity securities in 20Y4 affect Malia Industries' net income? oduct lines: costs:

✔a. $8,500 debit balance B1-35 Fair value adjustment for equity investments; less than 20% ownership Malia Industries owned the following equity investments as of December 31, 2013: Issuing Company Cost $75,000 $0,000 Jolliff Co. 25,000 $150.000 Polich Inc. Shaklee Corporation Fair Value $ 82,500 48,300 27,700 $158,500 Issuing Company Jolliff Co. Polich Inc. Shaklee Corporation Each of the preceding equity investments was purchased in 2013 and is less than 20% ownership of the issuing company. During 20Y4, Malia Industries did not purchase or sell any of the equity securities. The fair value of the equity securities as of December 31, 2014, was as follows: Obj.2 Cost $ 80,000 45,000 24,500 $149,500 a. What was the balance of Valuation Allowance for Equity Investments as of December 31, 20Y3? b. Journalize the adjustment to fair value for the equity investments as of December 31, 2014. c. After the adjustment in (b), what is the balance of Valuation Allowance for Equity Investments? d. Does the change in fair value of the equity securities in 20Y4 affect Malia Industries' net income? oduct lines: costs:

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

✓a. $8,500 debit
balance
B1-35 Fair value adjustment for equity investments; less than 20% ownership
Malia Industries owned the following equity investments as of December 31, 20Y3:
Issuing Company
Jolliff Co.
Polich Inc.
Shaklee Corporation
Cost
$ 75,000
50,000
25,000
$150,000
Issuing Company
Jolliff Co.
Polich Inc.
Shaklee Corporation
Fair Value
$ 82,500
48.300
27,700
$158,500
Each of the preceding equity investments was purchased in 20Y3 and is less than 20% ownership
of the issuing company. During 20Y4, Malia Industries did not purchase or sell any of the equity
securities. The fair value of the equity securities as of December 31, 20Y4, was as follows:
Obj. 2
Cost
$ 80,000
45,000
24,500
$149,500
a. What was the balance of Valuation Allowance for Equity Investments as of December 31, 20Y3?
b. Journalize the adjustment to fair value for the equity investments as of December 31, 20Y4.
c. After the adjustment in (b), what is the balance of Valuation Allowance for Equity Investments?
d. Does the change in fair value of the equity securities in 20Y4 affect Malia Industries' net income?
oduct lines:
costs:

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