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ast Unguaranteed Financial Inc. purchased the following Securities that management intends to actively trade for profit.trading...

  1. ast Unguaranteed Financial Inc. purchased the following Securities that management intends to actively trade for profit.trading securities during Year 1, its first year of operations:

    Name Number of Shares Cost
    Arden Enterprises Inc. 4,100 $80,770
    French Broad Industries Inc. 1,800 26,460
    Pisgah Construction Inc. 600 14,400
    Total $121,630

    The market price per share for the trading security portfolio on December 31, Year 1 was as follows:

    Market Price per Share
    Dec. 31, Year 1
    Arden Enterprises Inc. $25
    French Broad Industries Inc. 15.5
    Pisgah Construction Inc. 22.5

    a. Provide the journal entry to adjust the trading security portfolio to fair value on December 31, Year 1. If no entry is required, select "No entry required" and leave the amount boxes blank.

    Year 1, Dec. 31
    • Cash
    • Trading Investments
    • Unrealized Gain on Trading Investments
    • Unrealized Loss on Trading Investments
    • Valuation Allowance for Trading Investments
    • No entry required
    • Cash
    • Trading Investments
    • Unrealized Gain on Trading Investments
    • Unrealized Loss on Trading Investments
    • Valuation Allowance for Trading Investments
    • No entry required

    Feedback

    b. Assume that the market prices of the portfolio were the same on December 31, Year 2, as they were on December 31, Year 1.

    What would be the journal entry to adjust the portfolio to fair value? If no entry is required, select "No entry required" and leave the amount boxes blank.

    Year 2, Dec. 31
    • Cash
    • Trading Investments
    • Unrealized Gain on Trading Investments
    • Unrealized Loss on Trading Investments
    • Valuation Allowance for Trading Investments
    • No entry required
    • Cash
    • Trading Investments
    • Unrealized Gain on Trading Investments
    • Unrealized Loss on Trading Investments
    • Valuation Allowance for Trading Investments
    • No entry required
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