At December 31, year 1, Charter Holding Co. owned the following investments in capital stock of publicly traded companies (classified as available - for - sale securities) Cont Cirrat Market Vale L Brands, Inc. (5000 shares cost, 844 per share; market value, $ 52) $ 220 000 $ 260 000 The Ga, Inc. (4000 shats: cost, 342 per share; market value, $ 39) $ 168,000 $ 388,000 $ 156,000 $ 416,000 Inveer 2, Cliater engaged in the following two transactions: Apr 10 Sold 1, 000 shares of its investment in L Brands, Inc. , at a price of $ 58 per share, less a brokerage commission of $ 100. Aug Sold2000 shares of its investment in The Gap, Inc. at a price of $ 37 par share less a brokerage commission of S150 At December 31, ear 2, the market values of th = 5 = stocks were: L Brands, Ine 567 per share and The Gap. ne. 537 per share, Instructions a Illustrate the presentation of marketable securities and the unrealized holding gain or lo55 in Charters balance sheet at December 31, year 1. Include a caption indicating the section of the balance sheet in which each of these accounts appears b Prepare journal entries to record the transactions on April 10 and August Prior to taking a fair value 1 silent at the end of war 2 tetermine the un 11 jisfed balance in the War ketab Securities Grill unit ali 1 the Tr lied Holdinha Giairi (Or Loss) CFA | 111 ins, Isses have beeni Tetragilized surface last and silents atteclarit (Assuite That I line ali dl - 21

At December 31, year 1. Charter Holding Co. owned the following investments in capital stock of publicy traded companies (classified as available for sale securities) Cost Current Market Vahe L Brands, Inc. (5000 shares: cost, $44 per share; market value, $52) $ 220 000 $ 260 000 The Gap, Inc. (4000 shares: cost, $42 per share; market value, $39) $ 168 000 $ 388 000 $ 156 000 $ 416 000 In year 2, Charter engaged in the following two transactions: Apr. 10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share, and The Gap, Inc., $37 per share. Instructions a. Illustrate the presentation of marketable securities and the unrealized holding gain or loss in Charter's balance sheet at December 31, year 1. Include a caption indicating the section of the balance sheet in which each of these accounts appears b. Prepare journal entries to record the transactions on April 10 and August Prior to making a fair value adjustment at the end of year 2 determine the unadjusted balance in the Marketable Securities control account and the Unrealized Holding Gain or Loss) ott Investments account (Assume that no unrealized gains or losses have been recognized since last wear