Reporting and Interpreting Stock Investment Performance Kasznik Company began op

Question

Reporting and Interpreting Stock Investment Performance Kasznik Company began operations in 2016 and, by year-end (December 31), had made six stock investments. Year-end information on these stock investments follows. Company Barth, Ind. Foster, Inc. McNichols, Inc. Patell, Inc. Ertimur, Inc. Soliman, Inc. Cost or Equity Basis (as appropriate) Year-End Fair Value Investment Classification Trading Trading Available-for-sale Available-for-sale Equity method Equity method $68,000 162,500 197,000 157,000 100,000 136,000 $65,300 160,000 192,000 154,700 102,400 133,200

Explanation / Answer

D)Gain /(loss) on trading securities will be reported in income statement : Fair value -cost

        =[65300+160000]-[162500+68000]

       = 225300- 230500

        = -5200 loss

E)Unrealized gain/(loss) on available for sale reported in balance sheet: [192000+154700]-[197000+157000]

              =346700-354000

              = - 7300 loss

Total unrealized gain or loss reported in stockholders equity -5200-7300 = -12500

f)

Available for sale -7300 Trading securities -5200 Fair value adjustment - 12500

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