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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 longterm investment transactions during X:
Click the icon to view the transactions.
At yearend the fair value of the Portage shares is $ The fair value of the Woburn shares is $
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 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 availableforsale 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 yearend balance sheet and income statement, we will first prepare the Taccount for LongTerm Investments in Woburn Shares.
Now, show what Colorado would report on its yearend balance sheet. Use parentheses or a minus sign for losses.
More info
X
May Purchased shares, which make up of the ordinary shares of
Woburn Corporation at total cost of $
Jul Received annual cash dividend of $ per share on the Woburn investment.
Sep Purchased shares of Portage, Inc., ordinary shares as an availableforsale
investment, paying $ per share.
Oct Received cash dividend of $ per share on the Portage investment.
Dec Received annual report from Woburn Corporation. Net income for the year was
$
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