Professional Documents
Culture Documents
Amelia Putri Adinda 4b Lat 21
Amelia Putri Adinda 4b Lat 21
Amelia Putri Adinda 4b Lat 21
Nim:0502202098
Kelas: Akuntansi syariah 4b
PROBLEM 17-8
Fair Value
Unrealized
Security Cost Gain (Loss)
Delaney Motors $ 1,400,000 $1,600,000 $(200,000
Patrick Electric 1,000,000 720,000 (280,000)
Norton Ind. 22,500,000 22,225,000 275,000
$24,900,000 $24,545,000 ($355,000)
Previous Fair Value Adjustment (Cr) (1,000,000)*
Fair Value Adjustment (Dr) $ 645,000
(b) The unrealized holding loss on the valuation on the equity securities is
reported on the income statement. The gain would appear in the “Other
revenues and gains” section of the income statement. The Fair Value
Adjustment is a valuation account and it will be used to show the
reduction in the fair value of the equity securities. The equity securities
portfolio is disclosed in the balance sheet as an asset and reported at
its fair value. The asset is probably noncurrent in nature.
With 25% ownership, Brooks has significant influence and should apply
the equity method. No fair value adjustments are recorded under the
equity method.
(a) Equity Investment Portfolio
Investments:
Equity investments, at cost........ $261,000
Less: Securities fair value adjustment.. 38,000
Equity investments, at fair value.......... $223,000
Income Statement
Other income and expense Unrealized holding loss.. $38,000
Investments:
Equity Investments, at cost............ $289,000
Less: Securities fair value adjustm 11.000
Equity Investments, at fair value.. $278,000
Income Statement
Other income and expense Unrealized holding gain.............$27,000