Fair value adjustment for equity investments; less than 20% ownership Malia Industries owned the following equity investments as of December 31, 20Y3: Issuing Company Jolliff Co. Polich Inc. Shaklee Corporation Cost Fair Value $75,000 $82,500 50,000 48,300 25,000 $150,000 27,700 $158,500 Each of the preceding equity investments was purchased in 20Y3 and is less than 20% ownership of the issuing company. During 2014, Malia Industries did not purchase or sell any of the equity securities. The fair value of the equity securities as of December 31, 20Y4, was as follows: Issuing Company Jolliff Co. Polich Inc. Shaklee Corporation Fair Value $80,000 45,000 24,500 $149,500 a. What was the balance of Valuation Allowance for Equity Investments as of December 31, 20Y3? debit b. Journalize the adjustment to fair value for the equity investments as of December 31, 20Y4. If an amount box does not require an entry, leave it blank. 20Y4 Dec. 31 Unrealized Loss on Equity Investments Valuation Allowance for Equity Investments Feedback Check My Work b. Calculate the difference between fair market values (current and prior year). Unrealized gains increase cost basis. Unrealized losses decrease cost basis. c. After the adjustment in (b), what is the balance of Valuation Allowance for Equity Investments? credit d. Does the change in fair value of the equity securities in 2014 affect Malia Industries' net income? Yes