FKG Inc.carries the following investments on its books at December 31,2015,and December 31,2016.All securities were purchased during 2015.
Required:
(1. )Prepare the necessary journal entries for FKG on December 31,2015,and December 31,2016.
(2. )What net effect would the valuation of these stock investments have on 2015 net income? On 2016 net income?
Definitions:
Normative Statements
Statements that express value judgments or opinions about what ought to be, rather than facts that can be tested or verified.
Facts
Pieces of information that are verifiably true and can be proven with evidence or observation.
Rational Individuals
The concept that individuals make decisions based on the maximization of their utility or benefit, taking into consideration all available information and factors.
Preferences
The individual tastes and choices made by consumers in regard to different goods and services.
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