E17-9

(Available-for-Sale Securities Entries and Financial Statement Presentation) At December 31, 2013, the available-for-sale equity portfolio for Steffi Graf, Inc. is as follow.

Security Cost Fair Value Unrealized Gain (Loss)

A $17,500 $15,000 ($2,500)

B 12,500 14,000 1,500

C 23,000 25,500 2,500

Total $53,000 $54,500 1,500

Previous fair value adjustment balance 400

Dr. Fair value adjustmentDr. $1,100

On January 20, 2014, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees.

Instructions

(a)Prepare the adjusting entry at December 31, 2013, to report the portfolio at fair value.

(b) Show the balance sheet presentation of the investment-related accounts at December 31, 2013.

(Ignore notes presentation.)

(c)Prepare the journal entry for the 2014 sale of security A