The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 fill in the blank fill in the blank fill in the blank fill in the blank 20Y7 Dec. 31 fill in the blank fill in the blank fill in the blank fill in the blank b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the_____________(or a separate item if significant). Unrealized losses would be_____________in determining net income, while unrealized gains would be_____________in determining net income.. c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements? The unrealized gain on available-for-sale investments would be reported as______________. The debit balance of Valuation Allowance for Available-for-Sale Investments would be______________to the balance of the investments account of $551,000 to report the fair value of $609,000 on the______________.
The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000.
a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank.
| 20Y7 Feb. 24 | fill in the blank | fill in the blank | |
| fill in the blank | fill in the blank | ||
| 20Y7 Dec. 31 | fill in the blank | fill in the blank | |
| fill in the blank | fill in the blank |
b. How is a unrealized gain or loss for trading investments reported on the financial statements?
The unrealized gain or unrealized loss on trading investments is reported on the_____________(or a separate item if significant). Unrealized losses would be_____________in determining net income, while unrealized gains would be_____________in determining net income..
c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements?
The unrealized gain on available-for-sale investments would be reported as______________. The debit balance of Valuation Allowance for Available-for-Sale Investments would be______________to the balance of the investments account of $551,000 to report the fair value of $609,000 on the______________.
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