Problem 1, 8 points Below is information regarding investments held by Hamilton

Question

Problem 1, 8 points Below is information regarding investments held by Hamilton Company at the current year Parta: Hamilton Company owns 50.000 shares of Browning Company s shares have a cost basis of $500.0o0. The current market value of the Browning Company stock is $9.00 per share. What is the amount of change in value of the Browning Company stock held by Hamilton Company? Be sure to show your computations. (4 points) Part b. Prepare the necessary journal entry to record the fair value adjustment at year- end in the space provided below. (4 points)

Explanation / Answer

a. The amount of change in the value of the Browning Company stock held by Hamilton Company

= $450,000 - $500,000 = -$50,000. -- Unrealized loss.

b.

b. Entry to record the fair value adjustment Account Title Debit Credit Unrealized loss 50000 Fair value adjustment - Browning Co.stock 50000

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