Brooks Co. purchases various investments in trading securities at a cost of $ 66,000 on December 27,

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Brooks Co. purchases various investments in trading securities at a cost of $ 66,000 on December 27, 2013. (This is its first and only purchase of such securities.) At December 31, 2013, these securities had a fair value of $ 72,000.

1. Prepare the December 31, 2013, year-end adjusting entry for the trading securities’ portfolio.

2. Explain how each account in the entry of part 1 is reported in financial statements.

3. Prepare the January 3, 2014, entry when Brooks sells a portion of its trading securities (that had originally cost $ 33,000) for $ 35,000.

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Fundamental accounting principle

ISBN: 978-0078025587

21st edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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Question Posted: Nov 26, 2013 10:59 AM

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Brooks Co. purchases various investments in trading securities at a cost of $ 66,000 on December 27,

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1 2013 Dec 31 Fair Value AdjustmentTrading 6000 Unrealized GainIncome 60...View the full answer

Fundamental accounting principle

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