Question

Exercise 17-9 At December 31, 2017, the available-for-sale debt portfolio for Vaughn, Inc. is as follows Unrealized Gain (Loss) Security Fair Value Cost $36,750 $31,500 $(5,250) А 29,400 3,150 в 26,250 53,550 5,250 48,300 Total $111,300 $114,450 3,150 Previous fair value adjustment balance-Dr. 840 Fair value adjustment-Dr. $2,310 On January 20, 2018, Vaughn, Inc. sold security A for $31,710. The sale proceeds are net of brokerage fees.

Answer 1

Answer Amount eredit $ 2,310 calculation of gain Loos particulars $ 114,450 Fair value of post folio cost of portfolio ($111.300) unrealized Holding gain, $3,150 previous year fair value nids. Balauce $ 840 Cursend year Holding Gain Recognised $ 2,310 Adjustment entry at Dec 31, 2017 bate particulars TLF Debit securities fair value Adj. Available $2,310 for sale ale or To un realised Holding gain/ Loss Being to record the adjusting Culory for Reporting portfolio at fair value 7 vaughn.Ine Balance sheet current Assels Available for sale securilies $14,450 stock holders equity. . Common stock xxxx Additional- paid in capital Хххх Retained earuingo xXxx Add. Accumulated other comparalive Income ($ 2,310 + $ 840) $3150 Total steck holders equity xxx+$3150 Journal entry for sale of security & as follows Date particulars 2F Debit cash Ale 1$ 31,710 Loss on sale of securiles Ale Do $ 5040 TO Available for sale-secusiting florecord the sale of Securities Aat Loss] xxxx I credit |$36.750