Question

During 2019 the trading securities portfolio held by the Edelman Corporation consisted of the following investments: 1. 2. 2,000 shares of Bauer common stock purchased for $80,000. 1,500 shares of Snow common stock purchased for $60,000. At December 31, 2019, the fair values per share were Bauer $36 and Snow $45. Instructions (a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2019. Investment Cost 80,000 60, 6 Oo Fair Value Unrealized Gain / Loss 72 000 -8.youo 67 soosoo soo (b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2019. Hint: base on your schedule from part (a) Date Title and Explanation Ref Debit Credit

Answer 1

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Edelman Corporation
Calculation of fair value of investment
Shares	Number	Price per share	Fair value
Bauer	2,000.00	36.00	72,000.00
Snow	1,500.00	45.00	67,500.00
Answer a
Schedule of cost and fair value of the portfolio at Dec 31, 2019.
$//img.homeworklib.com/questions/66615290-04fd-11ea-89d2-d901346afc23.gif?x-oss-process=image/resize,w_560$ Investment	Cost	Fair value	Unrealized Gain/(Loss)
Bauer	80,000.00	72,000.00	(8,000.00)
Snow	60,000.00	67,500.00	7,500.00
Answer b	Journal Entry
$//img.homeworklib.com/questions/66615290-04fd-11ea-89d2-d901346afc23.gif?x-oss-process=image/resize,w_560$ Date	Account	Debit $	Credit $
31-Dec-19	Unrealized Loss	8,000.00
	Investment in Bauer		8,000.00
$//img.homeworklib.com/questions/66615290-04fd-11ea-89d2-d901346afc23.gif?x-oss-process=image/resize,w_560$ 31-Dec-19	Investment in Snow	7,500.00
	Unrealized Gain		7,500.00