46.

Storm, Inc. purchased the following available-for-sale securities during Year 1, its first year of operations:

Name

Number of Shares

Cost

Dust Devil, Inc.

1,880

$80,840

Gale Co.

800

64,000

Whirlwind Co.

2,850

111,150

Total

$255,990

The market price per share for the available-for-sale security portfolio on December 31, Year 1, was as follows:

	Market Price per Share,
	Dec. 31, Year 1
Dust Devil, Inc.	$39
Gale Co.	75
Whirlwind Co.	41

Required:

A.	Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.
B.	Describe the income statement impact from the December 31, Year 1, journal entry.

A. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, Year 1. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

B. Describe the income statement impact from the December 31, Year 1, journal entry.

There --------- income statement impact from the December 31, Year 1, adjusting entry. Unrealized Gain (Loss) on Available-for-Sale Investments is reported in the -------------- .

On December 31, Year 1, Unrealized Gain or Loss on Available-for-Sale Investments would be disclosed as follows (if a loss, use a minus sign): ---------------

Unrealized gain (loss) on available-for-sale investments: