Question

E17.19 (LO 2,4) (Fair Value Measurement) Presented below is information related to the purchases of common stock by Lilly Company during 2020. Cost Fair Value (at purchase date) (at December 31) Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000

Answer 1

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solution Journal Entries Credit Debit Accounts Titles $20,000 A@ $20,000 Unrealized gain) loss C$100,000-$80,000) To Equity Investment (Being amount recorded adjustment. for Anoyo $50,000 D $ 50,000 -> Fair Value Adiustment . . C 300,000~250,000) To. Urwealized gain! 1051 [Being amount recorded towards! adjustment for Lee $10,000 - Fair value Adjustment (190,000- 180,000) $10000 To Unrealized gain loss (Being amount recorded towards adjustment for wood