Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Presented below is information related to the purchases of common stock by Sweet Company during 2017. Cost (at purchase date) Fair Value (at December 31)
Presented below is information related to the purchases of common stock by Sweet Company during 2017.
| Cost (at purchase date) | Fair Value (at December 31) | |||
| Investment in Arroyo Company stock | $92,000 | $74,000 | ||
| Investment in Lee Corporation stock | 265,000 | 312,000 | ||
| Investment in Woods Inc. stock | 178,000 | 189,000 | ||
| Total | $535,000 | $575,000 |
(Assume a zero balance for any Fair Value Adjustment account.)
| (a) | What entry would Sweet make at December 31, 2017, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? | |
| (b) | What entry would Sweet make at December 31, 2017, to record the investments in the Lee and Woods corporations, assuming that Sweet did not select the fair value option for these investments? |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started