Question
39 Pharoah Corporation has the following investment which was held throughout 20212022: Fair Value Cost 12/31/21 12/31/22 Equity investment $932000 $1236000 $1180000 What amount of
39
Pharoah Corporation has the following investment which was held throughout 20212022:
| Fair Value | ||||||
| Cost | 12/31/21 | 12/31/22 | ||||
| Equity investment | $932000 | $1236000 | $1180000 | |||
What amount of gain or loss would Pharoah Corporation report in its income statement for the year ended December 31, 2022 related to its investment, if the fair value method of accounting was used?
a. $304000 gain.
b. $56000 gain.
c. $56000 loss.
d. $248000 gain.
40
At December 31, 2021, Cullumber Company has an equity portfolio valued at $127000. Its cost was $110000. If the Securities Fair Value Adjustment has a debit balance of $6900, which of the following journal entries is required at December 31, 2021?
| a. Fair Value Adjustment | 10100 | |
| Unrealized Holding Gain or Loss-Income | 10100 | |
| b. Fair Value Adjustment | 17000 | |
| Unrealized Holding Gain or Loss-Income | 17000 | |
| c. Unrealized Holding Gain or Loss-Income | 17000 | |
| Fair Value Adjustment | 17000 | |
| d. Unrealized Holding Gain or Loss-Income | 10100 | |
| Fair Value Adjustment | 10100 | |
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