Perez Company began operations in 2011. Since then, it has reported the following gains and losses for

Question:

Perez Company began operations in 2011. Since then, it has reported the following gains and losses for its investments in trading securities on the income statement:
At January 1, 2014, Perez owned the following trading securities:

__________________________________________Cost
BKD Common (15,000 shares)............................$450,000
LRF Preferred (2,000 shares).................................210,000
Drake Convertible bonds (100 bonds)...................115,000
During 2014, the following events occurred:
1. Sold 5,000 shares of BKD for $170,000.
2. Acquired 1,000 shares of Horton Common for $40 per share. Brokerage commissions totaled $1,000.
At 12/31/14, the fair values for Perez's trading securities were:
BKD Common, $28 per share
LRF Preferred, $110 per share
Drake Bonds, $1,020 per bond
Horton Common, $45 per share
Instructions
a) Prepare a schedule which shows the balance in the Fair Value Adjustment (trading) account at December 31, 2013 (after the adjusting entry for 2013 is made).
b) Prepare a schedule which shows the aggregate cost and fair values for Perez's trading securities portfolio at 12/31/14.
c) Prepare the necessary adjusting entry based upon your analysis in (b) above.

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...