Question
During the month, Blue, Inc. purchased 900 shares for $8.00 per share and classified them as trading investments. At the end of the month, the
During the month, Blue, Inc. purchased 900 shares for $8.00 per share and classified them as trading investments. At the end of the month, the price of the securities was $9.75 per share. What adjusting entry, if any, will Blue, Inc. record when it closes its books at the end of the month to reflect this change in value?
A. Because the trading investments were not sold during the month, no adjusting entry is required.
B.
| Dr. Unrealized Loss on Trading Investment | $1,575.00 | |
| Cr. Valuation Allowance for Trading Investments | $1,575.00 |
c.
| Dr. Valuation Allowance for Trading Investments | $1,575.00 | |
| Cr. Unrealized Gain on Trading Investments | $1,575.00 |
D.
| Dr. Valuation Allowance for Trading Investments | $1,575.00 | |
| Cr. Realized Gain on Trading Investments | $1,575.00 |
E.
| Dr. Valuation Allowance for Trading Investments | $8,775.00 | |
| Cr. Unrealized Gain on Trading Investments | $8,775.00 |
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Auditing And Assurance Services
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
16th Global Edition
1292147989, 978-1292147987
