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Colorado Exchange Company completed the following long - term investment transactions during 2 0 X 6 : ( Click the icon to view the transactions.

Colorado Exchange Company completed the following long-term investment transactions during 20X6:
(Click the icon to view the transactions.)
At year-end the fair value of the Portage shares is $30,100. The fair value of the Woburn shares is $657,000.
Requirements
For which investments is fair market value used in the accounting? Why is fair market value used for one investment and not the other?
Requirement 1. For which investments is fair market value used in the accounting? Why is fair market value used for one investment and not the other?
Fair market value is used to account for the available-for-sale investment because the investor expects to sell the shares at its fair value. Fair market value is not used for the
investment because the investor holds the
shares to influence the operations of the investee company .
tax. (Leave any unused cells blank.)
Before completing the year-end balance sheet and income statement, we will first prepare the T-account for Long-Term Investments in Woburn Shares.
Now, show what Colorado would report on its year-end balance sheet. (Use parentheses or a minus sign for losses.)
More info
20X6
May 12 Purchased 18,200 shares, which make up 45% of the ordinary shares of
Woburn Corporation at total cost of $340,000.
Jul 9 Received annual cash dividend of $1.25 per share on the Woburn investment.
Sep 16 Purchased 900 shares of Portage, Inc., ordinary shares as an available-for-sale
investment, paying $40.00 per share.
Oct 30 Received cash dividend of $0.35 per share on the Portage investment.
Dec 31 Received annual report from Woburn Corporation. Net income for the year was
$520,000.
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