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Entries for Available-for-Sale and Trading Securities The following information is available for Kinney Company at December 31 2012 regarding its investments Securities Cost Fair Value

(Entries for Available-for-Sale and Trading Securities) The following information is available for Kinney Company at December 31, 2012, regarding its investments.

Securities

Cost

Fair Value

3,000 shares of Petty Corporation Common Stock

$40,000

$46,000

1,000 shares of Dowe Incorporated Preferred Stock

25,000

22,000

 

$65,000

$68,000

Instructions

(a) Prepare the adjusting entry (if any) for 2012, assuming the securities are classified as trading.

(b) Prepare the adjusting entry (if any) for 2012, assuming the securities are classified as available-for-sale.

(c) Discuss how the amounts reported in the financial statements are affected by the entries in (a) and (b).

Jun 18 2020 View more View Less

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