Plotner Corporation Has the Following Trading Portfolio of Stock Investments

question 77

Essay

Plotner Corporation has the following trading portfolio of stock investments as of December 31 2017. $\begin{array}{ccc} \underline{\text { Security }} & \underline{ \text { Cost }}& \underline{ \text { Fair Value }}\\\mathrm{A} & \$ 19,000 & \$ 15,000 \\\mathrm{~B} & 22,000 & 27,000 \\\mathrm{C} & \underline{34,000} & \underline{29,000} \\&\underline{\$75,000}&\underline{\$71,000}\end{array}$ On January 22 2018 Plotner Corporation sold security C for $32000.
Instructions
(a) Prepare the adjusting entry for Plotner Corporation on December 31 2017 to report the portfolio at fair value.
(b) Indicate the balance sheet and income statement presentation of the fair value data for Plotner Corporation at December 31 2017.
(c) Prepare the journal entry for the 2018 sale.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, including revenues, expenses, and net income or loss.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.

Depreciation

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.

Original Cost

The initial purchase price or cost of acquiring an asset, before any depreciation or amortization.