Brandy Corporation's Trading Portfolio at the End of the Year

question 28

Short Answer

Brandy Corporation's trading portfolio at the end of the year is as follows: $\begin{array}{lrr}\text {Security }&\text {Cost }&\text {Fair Value }\\\text { Common Stock C } & \$ 10,000 & \$ 12,000 \\\text { Common Stock D } & 9,000 & 5,000\\&\$19,000&\$17,000\end{array}$ At the end of the year, Brandy Corporation should
A) set up a Fair Value Adjustment account for Stock D.
B) set up a Fair Value Adjustment account for the portfolio.
C) recognize an Unrealized Gain or Loss-Income for $4,000.
D) report a loss on the income statement for $4,000 under "Other expenses and losses."

• A) set up a Fair Value Adjustment account for Stock D.
• B) set up a Fair Value Adjustment account for the portfolio.
• C) recognize an Unrealized Gain or Loss-Income for $4,000.
• D) report a loss on the income statement for $4,000 under "Other expenses and losses."