Inverness Investments purchased Dorr Corp. shares as a trading security on December 16 for $85,000. 1. Suppose

Question:

Inverness Investments purchased Dorr Corp. shares as a trading security on December 16 for $85,000.
1. Suppose the Dorr Corp. shares decreased in value to $78,000 at December 31. Make the Inverness journal entry to adjust the Investment in Trading Securities account to market value.
2. Show how Inverness would report the Investment in Trading Securities on its and the unrealized gain or loss on its income statement.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...