Available-for-Sale Securities Entries and Financial Statement Presentation at December 31, 2010, the available-for-sale equity portfolio for Wenger, Inc. is as follows. On January 20, 2011, Wenger,...

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Available-for-Sale Securities Entries and Financial Statement Presentation at December 31, 2010, the available-for-sale equity portfolio for Wenger, Inc. is as follows. On January 20, 2011, Wenger, Inc. sold security A for $15,300. The sale proceeds are net of brokerage fees.
(a) Prepare the adjusting entry at December 31, 2010, to report the portfolio at fair value.
(b) Show the balance sheet presentation of the investment related accounts at December 31, 2010. (Ignore notes presentation.)
(c) Prepare the journal entry for the 2011 sale of securityA.





Answered Same DayDec 22, 2021

Answer To: Available-for-Sale Securities Entries and Financial Statement Presentation at December 31, 2010, the...

Robert answered on Dec 22 2021
129 Votes
A)The portfolio should be reported at the fair value of $54,500. Since the
cost of the portfolio is $53,000, the unrealized holding gain is $1,500, of
which $200 is already recognized. Therefore, the December 31, 2010
adjusting entry should be:
Securities Fair Value ...... 1,300
Unrealized Holding Gain or Loss—Equity.... 1,300
(b) The unrealized holding gain of $1,500 (including the previous balance of
$200) should be reported as an addition to stockholders’ equity and the
Securities Fair Value Adjustment (Available-for-Sale) account balance of
$1,500 should be added to the cost of the...
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