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Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016,

Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016, its first year of operations. The cost

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Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016, its first year of operations. The cost and fair value of this portfolio on December 31, 2016, was as follows:

On June 12, 2017, Hurricane purchased 1,450 shares of Rogue Wave Inc. at $45 per share plus a $100 brokerage commission.
a. Provide the journal entries to record the following:
1. The adjustment of the available-for-sale security portfolio to fair value on December 31, 2016.
2. The June 12, 2017, purchase of Rogue Wave Inc. stock.
b. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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Name Tornado Inc. Tsunami Corp. Number of Shares 800 1,250 2,140 Total Cost $14,000 31,250 43,870 589,120 Total Falr Value $15,600 35,000 42,800 $93,400 Total

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Financial Accounting

ISBN: 978-1305088436

14th edition

Authors: Carl S. Warren, Jim Reeve, Jonathan Duchac

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Question Posted: Dec 19, 2016 10:59 AM

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