Available-for-sale securities; adjustment to fair value During its first year of...
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Accounting
Availableforsale securities; adjustment to fair value
During its first year of operations, Giovani Foods purchased availableforsale securities for $ Giovani Foods expects it will sell the securities within the next year. At the end of the year, these securities had a market value of $
Assume that Giovani Foods did not purchase or sell any availableforsale securities during its second year of operations. At the end of the second year, the market value of the availableforsale securities is $
a What would be the amount of the adjustment to fair value for the availableforsale securities
$
b After the adjustment is posted to the accounts, what is the balance of the valuation allowance for availableforsale securities account?
c How would the increase in the fair value of the securities in the second year be reported on Giovani Foods' financial statements?
The availableforsale securities would be reported as : on the balance sheet. The unrealized gain on availableforsale securities would be reported as an addition to on the balance sheet.
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