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Ewok Enterprises recently elected the fair value option to account for its investment in Yoda Inc. Ewok has significant influence over Yoda. Ewok purchased the shares for $210,000 and the shares are currently trading for $195,000 at year-end. Record the journal entries needed to purchase the investment, and then adjust it to fair value. Then, show how this investment will be reported on the balance sheet at year-end.
Price-Earnings Ratio
A valuation ratio of a company's current share price compared to its per-share earnings (EPS), used to evaluate if a stock is under or overvalued.
Percentage Change
Percentage change refers to the measure of the degree of change over time, calculated as the difference between two values divided by the original value, times 100.
Base Year
A specific year against which economic or financial indices are measured to track changes and trends over time.
Profit Margin Ratio
A financial ratio that measures the percentage of revenue that exceeds the cost of goods sold, indicating how much profit a company makes for each dollar of sales.
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