Presented below is information related to the purchases of common stock by Lilly Company during 2017. Cost
Question:
Presented below is information related to the purchases of common stock by Lilly Company during 2017.
Cost (at purchase date) | Fair Value (at December 31) | ||
Investment in Arroyo Company stock | $100,000 | $80,000 | |
Investment in Lee Corporation stock | 250,000 | 300,000 | |
Investment in Woods Inc. stock | 180,000 | 190,000 | |
Total | $530,000 | $570,000 |
Instructions
(Assume a zero balance for any Fair Value Adjustment account.)
(a) What entry would Lilly make at December 31, 2017, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option?
(b) What entry(ies) would Lilly make at December 31, 2017, to record the investments in the Lee and Woods corporations, assuming that Lilly did not select the fair value option for these investments?
Expert Answer:
No Accounts Titles Debit Credit a Unrealized GainLoss 100000 80000 20000 Equ... View the full answer
Fundamentals of Advanced Accounting
ISBN: 978-0077667061
5th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
