On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a

Question

On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account. There was no change during 2011 in the composition of Calhoun's portfolio of marketable equity securities held as available-for-sale securities. The following information pertains to that portfolio:

Security Cost Fair Value at 12/31/11

X $125,000 $160,000
Y 100,000 95,000
Z 175,000 125,000

$400,000 $380,000

What amount of unrealized loss on these securities should be included in Calhoun's stockholders' equity section of the balance sheet at December 31, 2011?

$30,000.

$20,000.

$10,000.

$0.

Explanation / Answer

Unrealized loss = 400,000 - 380,000
Unrealized loss = 20,000...............(answer)

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