Storm, Inc. purchased the following available-for-sale securities during 2016, its first year of operations: Name ...........................Number of

Question:

Storm, Inc. purchased the following available-for-sale securities during 2016, its first year of operations:

Name ...........................Number of Shares..................Cost

Dust Devil, Inc.........................1,900....................$ 81,700

Gale Co....................................850......................68,000

Whirlwind Co. ........................2,850.....................114,000

Total...............................................................$263,700

The market price per share for the available-for-sale security portfolio on December 31,

2016, was as follows:

Market Price per Share,

Dec. 31, 2016

Dust Devil, Inc......................................................$40

Gale Co. ...............................................................75

Whirlwind Co. .......................................................42

a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, 2016.

b. Describe the income statement impact from the December 31, 2016, journal entry.

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...