Loreal-American Corporation purchased several marketable securities during 2016. At December 31,...

Question:

Loreal-American Corporation purchased several marketable securities during 2016. At December 31, 2016, the company had the investments in common stock listed below. None was held at the last reporting date, December 31, 2015, and all are considered securities available-for-sale.

Schedule of Expected Cash Collections Cost Fair Value Unrealized Holding Gain (Loss)
Short term:
Blair, Inc. $ 518,000 $ 386,000 $ (132,000 )
ANC Corporation 469,000 518,000 49,000
Totals $ 987,000 $ 904,000 $ (83,000 )
Long term:
Drake Corporation $ 518,000 $ 579,000 $ 61,000
Aaron Industries 701,000 679,000 (22,000 )
Totals $ 1,219,000 $ 1,258,000 $ 39,000

Prepare the appropriate adjusting entry at December 31, 2016. What amounts would be reported in the income statement at December 31, 2016, as a result of the adjusting entry?

Available for Sale Securities:

Available for sale securities are typically stocks or some other form of investments that are not held to maturity or trading assets. The changes in market value for these assets are shown in other comprehensive income (OCI) until they are sold.

Answer and Explanation:

Take all the gains and losses in the last column of the table and net them together to get $44,000. See below for the journal entry.

DateAccountDeb...

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