Answered: On its December 31, 2020 balance sheet,…

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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On its December 31, 2020 balance sheet, Blossom Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2021 in the composition of Blossom’s portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio:

Security	cost	Fair value at 12/31/21
X	$150000	$190000
Y	120000	105000
Z	215000	165000
	$485000	$460000

The amount of unrealized loss to appear as a component of comprehensive income for the year ending December 31, 2021 is

$35000.

$25000.

$0.

$40000.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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