Element Company Had the Following Long-Term Available-For-Sale Securities in Its

question 192

Essay

Element Company had the following long-term available-for-sale securities in its portfolio at December 31 for each of the years listed.The year-end cost and fair values for its portfolio follow.Beginning with Year 1,prepare the appropriate journal entry to record each year-end market adjustment for these securities.
$\begin{array}{lcc}& & \text { Fair } \\\text { Available-for-Sale Securities } & \text { Cost } & \text { Value }\\\text { Year 1 } & \$ 404,000 & \$ 410,000 \\\text { Year 2 } & 406,000 & 414,000 \\\text { Year 3 } & 461,000 & 472,000\end{array}$

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Definitions:

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing companies to adjust all inputs.

Least-cost Production

A production method where the combination of resources used minimizes costs for a given output level, achieving productive efficiency.

Per Unit Costs

The average cost of production or delivery per individual unit, calculated by dividing total costs by the number of units produced or delivered.

Output Level

is the quantity of goods or services produced within a given period by a firm or economy.