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Prepare the adjusting entry

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Question - Entries for Available-for-Sale and Trading Securities

The following information is available for Quigley Company at December 31, 2017, regarding its investments.

Securities

Cost

Fair Value

500 shares of Runner Corporation common stock

$25,000

$40,000

7,000 shares of Sher-tor Corporation preferred stock

650,000

620,000

 

$675,000

$660,000

The company did not have any investments prior to 2017.

Instructions -

(a) Prepare the adjusting entry (if any) for 2017, assuming the securities are classified as trading.

(b) Prepare the adjusting entry (if any) for 2017, assuming the securities are classified as available-for-sale.

(c) Discuss how the amounts reported in the financial statements are affected by the entries in (a) and (b).

Reference no: EM132503848

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