Recording and Reporting Investments in Equity SecuritiesFVNI

Adjust FVA at Year-End

On January 1, 2020, Laker Company acquired the following equity securities and classified them as having insignificant influence.

Co.	Description	Quantity	Unit Cost
T	Common stock (no-par)	1,000 shares	$20
U	Common stock (par $10)	1,000 shares	15
V	Preferred stock (par $20, nonconvertible)	400 shares	30
W	Common stock (no-par)	1,000 shares	10

Per share data subsequent to the acquisition are as follows.

Dec. 31, 2020	Fair values: T stock, $16; U stock, $15; V stock, $35; and W stock, $9.90.
Feb. 10, 2021	Cash dividends declared and received: T stock, $1.50; U stock, $1; and V stock, $0.50.
Nov. 1, 2021	Sold the shares of V stock at $38.
Dec. 31, 2021	Fair values: T stock, $13; U stock, $17; and W stock, $10.15.

a. Provide the following entries for Laker Company for 2020 and 2021, assuming that the Fair Value Adjustment account for the investment portfolio is updated annually on December 31. 1. Purchase of equity securities on January 1, 2020. 2. Adjustment to fair value on December 31, 2020. 3. Receipt of declared dividends on February 10, 2021. 4. Sale of V stock shares on November 1, 2021. 5. Adjustment to fair value on December 31, 2021. Note: List multiple debits or credits (when applicable) in alphabetical order. Date Dr. Cr. 1 Jan. 1, 2020 0 0 Account Name Investment in Company T Stock Investment in Company U Stock Investment in Company V Stock Investment in Company W Stock 0 0 0 0 0 0 . 0 0 2 Dec 31, 2020 0 0 0 0 3 Feb. 10, 2021 0 0 0 0 4 Nov. 1, 2021 0 0 0 0 Investment in Company V Stock 0 0 5 Dec. 31, 2021 0 0 0 0 Provide the income statement and balance sheet presentation for Laker Company that would reflect these investments for 2020 and 2021. Assume a December 31 year-end. Note: Indicate a loss with a negative sign. 2020 2021 0 $ 0 Income Statement Dividend revenue Gain on sale of securities Unrealized loss on equity securities $ 0 0 0 0 2020 2021 Balance Sheet, Dec. 31 Current Assets Investment in equity securities $ 0 $ 0