Ticker Services began operations in 2015 and maintains long-term investments in

Question

Ticker Services began operations in 2015 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow.

Also Prepare journal entries to record each year-end fair value adjustment for these securities.

Portfolio of Available-for-Sale Securities Cost Fair Value December 31, 2015 $ 335,320 $ 325,260 December 31, 2016 382,265 405,201 December 31, 2017 519,880 615,018 December 31, 2018 785,019 698,667 General Calculation Journal Calculation adjustment required to fair value adjustment. 12/31/15 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/16 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/17 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/18 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT)

Explanation / Answer

Solution :

Calculation adjustment required for fair value adjustments Date Particluars Amount 31-Dec-15 Existing balance in fair value adjustment - AFS $0.00 Required balance in fair value adjustment - AFS $325,260 - $335,320 -$10,060.00 Adjustment required to fair value adjustment - AFS -$10,060.00 31-Dec-16 Existing balance in fair value adjustment - AFS -$10,060.00 Required balance in fair value adjustment - AFS $405,201 - $382,265 $22,936.00 Adjustment required to fair value adjustment - AFS $32,996.00 31-Dec-17 Existing balance in fair value adjustment - AFS $22,936.00 Required balance in fair value adjustment - AFS $615,018 - $519,880 $95,138.00 Adjustment required to fair value adjustment - AFS $72,202.00 31-Dec-18 Existing balance in fair value adjustment - AFS $95,138.00 Required balance in fair value adjustment - AFS $698,667 - $785,019 -$86,352.00 Adjustment required to fair value adjustment - AFS -$181,490.00

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