Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Cost Company A bonds Company B notes Company C bonds $ 535,300 159,380 662,750 Fair Value $ 490,000 154,000 713,630 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $79,200. July 6 Purchased Company X bonds for $126,600. November 13 Purchased Company Z notes for $267,900. December 9 Sold all of the Company A bonds for $515,000. Fair values at December 31 are B, $81,000; C, $665,000; X, $118,000; and Z, $278,000.

Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Cost Company A bonds Company B notes Company C bonds $ 535,300 159,380 662,750 Fair Value $ 490,000 154,000 713,630 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $79,200. July 6 Purchased Company X bonds for $126,600. November 13 Purchased Company Z notes for $267,900. December 9 Sold all of the Company A bonds for $515,000. Fair values at December 31 are B, $81,000; C, $665,000; X, $118,000; and Z, $278,000.

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

Can you please help with:

Balance at the beginning of year in the Fair Value Adjustment account

December 31 required adjustment to the Fair Value Adjustment account

Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following.
Fair Value
$ 490,000
154,000
713,630
Available-for-Sale Securities
Cost
Company A bonds
Company B notes
Company C bonds
$ 535,300
159,380
662,750
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
January 29 Sold one-half of the Company B notes for $79,200.
July 6 Purchased Company X bonds for $126,600.
November 13 Purchased Company Z notes for $267,900.
December 9 Sold all of the Company A bonds for $515,000.
Fair values at December 31 are B, $81,000; C, $665,000; X, $118,000; and Z, $278,000.

Fair Value Adjustment Computation - Available-for-Sale Securities
Cost
Fair Value
December 31 AFS Securities
Company B notes
Company C bonds
Company X bonds
Company Z bonds
Total
$
79,690 S
662,750
126,600
267,900
1,136,940
81,000
665,000
118,000
278,000
$ 1,142,000
December 31 Balance in the Fair Value Adjustment account
Balance at beginning of year in the Fair Value Adjustment account
December 31 required adjustment to the Fair Value Adjustment account
Unrealized
Amount
$
$
69
5,060
5,060
4,860 X
5,060
Gain or
Loss?
Gain
Debit
Debit
Debit

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