This is a practice problem that will not be graded. I have been working on it for two days. This problem makes no sense to me at all. There is going to be a problem like this on a test, (not this problem.)
I would like a step by step break down on how to solve for both parts A and B. I know that on part A the Securities fair value adjustment for trading is $180,000. I have no idea where I am going wrong. Please help if you can.
See *ATTACHED* file for complete details!
(a) The first class of investment is in trading securities. The adjusting entry for fair value will be to account for the unrealized profit / loss in fair value
Unrealized gain on Dale Davis = 1,600,000-1,400,000=200,000
Unrealized gain on Smith Electrics = 620,000-1,000,000= - 380,000
Net unrealized gain = 200000-380000=-18000
(the negative sign indicates loss)
The adjusting entry will be
Unrealized Holding Gain or Loss ...
You will find the answer to this puzzling assignment inside...