Ask Question
8 October, 01:42

On December 31, Mars Co. had the following portfolio of stock investments with insignificant influence. Mars had no stock investments in prior periods. Stock Investments Cost Fair Value Apple stock $ 5,700 $ 9,300 Chipotle stock 3,300 1,600 Under Armour stock 12,900 13,700 Prepare the December 31 adjusting entry to report these investments at fair value.

+3
Answers (1)
  1. 8 October, 02:11
    0
    Journal Entries

    Dr. Investment in Apple stock $3,600

    Dr. Investment in Under Armour stock $800

    Cr. Investment in Chipotle stock $1,700

    Cr. Unrealized gain Investments $2,700

    Explanation:

    The Investments held at the fair value should be revalued at each period end and record the gain or loss arising from the fair value adjustments. This done to present the true position of the investments. Increase in the fair value as compared to prior value or cost will result as gain and decrease as loss.

    Following is the working to make fair value adjustment.

    Cost Fair Value Difference

    Apple stock $5,700 $9,300 Increased by $3,600

    Chipotle stock $3,300 $1,600 Decreased by $1,700

    Under Armour stock $12,900 $13,700 Increased by $800
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On December 31, Mars Co. had the following portfolio of stock investments with insignificant influence. Mars had no stock investments in ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers