Question
At December 31, 2017, the available-for-sale debt portfolio for Pharoah, Inc. is as follows. Security Cost Fair Value Unrealized Gain (Loss) A $35,000 $30,000 $(5,000
At December 31, 2017, the available-for-sale debt portfolio for Pharoah, Inc. is as follows.
| Security | Cost | Fair Value | Unrealized Gain (Loss) | ||||
| A | $35,000 | $30,000 | $(5,000 | ) | |||
| B | 25,000 | 28,000 | 3,000 | ||||
| C | 46,000 | 51,000 | 5,000 | ||||
| Total | $106,000 | $109,000 | 3,000 | ||||
| Previous fair value adjustment balanceDr. | 800 | ||||||
| Fair value adjustmentDr. | $2,200 | ||||||
On January 20, 2018, Pharoah, Inc. sold security A for $30,200. The sale proceeds are net of brokerage fees.
1. Show the balance sheet presentation of the investment-related accounts at December 31, 2017. (Do not leave any answer field blank. Enter 0 for amounts.)
PHAROAH, INC
Balance Sheet
Dec 31, 2017
Current Assets
Debt Investments $
Stockholders' Equity
Common Stock $
Additional Piad-in Capital $
Retained Earnings $
$
Add:
Accumulated other Comprehensive income $
Total Stockholders' Equity $
2. Prepare the journal entry for the 2018 sale of security A. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| Datwe | Account | Dr | Cr |
| Jan 20, 2018 | Cash | ? | |
| Loss on Sale of Investments | ? | ||
| ? | ? |
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Authors: Zabihollah Rezaee
1st Edition
1631571567, 978-1631571565
