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