Question

ABC Company purchased shares of stock of another company for $75,000 during 2008; the shares were...

ABC Company purchased shares of stock of another company for $75,000 during 2008; the shares were classified as trading securities. At the end of 2008, the shares were valued at $81,000 and at the end of 2009 were valued at $79,000. ABC owned no other securities. During 2010 the securities were sold for $83,000. With regard to these securities,what is the balance in the contra-asset account, Fair Value Adjustment Trading Securities at the end of 2009?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Fair value adjustment trading securities = Market value-Purchase cost

= 79000-75000

Fair value adjustment trading securities = 4000 Debit balance

Add a comment
Know the answer?
Add Answer to:
ABC Company purchased shares of stock of another company for $75,000 during 2008; the shares were...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 4. On Jan 1, 2008, Brown Corp purchased 12% ABC Corp’s common stock for $50,000. During...

    4. On Jan 1, 2008, Brown Corp purchased 12% ABC Corp’s common stock for $50,000. During 2008, ABC declared and paid a dividend of $60,000. ABC Corp also had net income $10,000 for year 2008. On Dec 31, 2008, Brown Corp’s share of ABC common stock had a fair value of $70,000. How much should Brown Corp show in the 2008 I/S as dividend revenue from this investment?

  • On 1/1/2008 Aero Company purchased 10% of Bert Company’s common stock for $80,000, which was equal...

    On 1/1/2008 Aero Company purchased 10% of Bert Company’s common stock for $80,000, which was equal to 10% of the book value of Bert on 1/1/2008. Aero appropriately used the cost method of accounting for its investment.  Aero purchased an additional 25% of Bert's common stock on 1/1/2010 for $190,000 which was also equal to its share of book value at that date.  Aero can now exercise significant influence over the operating and financial policies of Bert.  The total net income and dividends...

  • On 1/1/2008 Aero Company purchased 10% of Bert Company’s common stock for $80,000, which was equal...

    On 1/1/2008 Aero Company purchased 10% of Bert Company’s common stock for $80,000, which was equal to 10% of the book value of Bert on 1/1/2008. Aero appropriately used the cost method of accounting for its investment.  Aero purchased an additional 25% of Bert's common stock on 1/1/2010 for $190,000 which was also equal to its share of book value at that date.  Aero can now exercise significant influence over the operating and financial policies of Bert.  The total net income and dividends...

  • A company purchased shares costing $70169 during the year. These shares are classified as FVTOCI. At...

    A company purchased shares costing $70169 during the year. These shares are classified as FVTOCI. At the end of the year, the company received $2695 in dividends from these shares. At year-end, the fair value of the shares is $148156. What is the net impact on the Statement of Comprehensive Income for the year? Select one: a. $0 revenue in profit and loss and $80682 in other comprehensive income O b. $2695 revenue in profit and loss and $77987 in...

  • A company purchased shares costing $113760 during the year. These shares are classified as FVTOCI. At...

    A company purchased shares costing $113760 during the year. These shares are classified as FVTOCI. At the end of the year, the company received $4331 in dividends from these shares. At year-end, the fair value of the shares is $164531. What is the net impact on the Statement of Comprehensive Income for the year? Select one: $4331 revenue in profit and loss and so in other comprehensive income B. $4331 revenue in profit and loss and $50771 in other comprehensive...

  • The investments of Charger Inc. include a single investment: 11,010 shares of Raiders Inc. common stock...

    The investments of Charger Inc. include a single investment: 11,010 shares of Raiders Inc. common stock purchased on February 24, Year 1, for $39 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, Year 1, balance sheet date, the share price had increased to $42 per share. Required: A. Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31, Year 1. Refer...

  • Fair Value Journal Entries, Trading Investments Jets Bancorp Inc. purchased a portfolio of trading securities during...

    Fair Value Journal Entries, Trading Investments Jets Bancorp Inc. purchased a portfolio of trading securities during 2073. The cost and fair value of this portfolio on December 31, 20Y3, was as follows: Name Number of Shares Total Cost Total Fair Value Dolphins Inc. Marino Company 1,600 1,400 $28,800 35,000 21,000 $32,000 30,800 Namath Company 600 19,800 Total $84,800 $82,600 Journalize the entry to record the adjustment of the trading security portfolio to fair value on December 31, 20Y3. If an...

  • On January 1, 2016, Nellie Company paid $100,000 for 8,400 shares of Patti Company common stock....

    On January 1, 2016, Nellie Company paid $100,000 for 8,400 shares of Patti Company common stock. These securities were classified as trading securities. The ownership in Patti Company is 10%. Patti reported net income of $54,000 for the year ended December 31, 2016. The fair value of the Patti stock on that date was $56 per share. What amount will be reported in the balance sheet of Nellie Company for the investment in Patti at December 31, 2016? TTT Arial...

  • An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $41per share....

    An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $41per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC The entrepreneur was reminded by the...

  • An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share....

    An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC. The entrepreneur was reminded by the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT