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10 September, 20:49

Adams Industries holds 42,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2018, and December 31, 2019, the market value of the stock is $95 and $105 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2019 balance sheet?

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  1. 11 September, 00:37
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    investment in FedEx = 4410000

    Unrealized holding gain = 420000

    Explanation:

    given data

    FedEx common stock = 42,000 shares

    market value = $95

    market value = $105

    to find out

    what amount will it be reported in the 2019 balance sheet

    solution

    we know that It is coming under available for sale security since the shares hold is less than majority of outstanding shares

    and here

    investment in FedEx = 42,000 * 105

    investment in FedEx = 4410000

    and

    Unrealized holding gain is = (105 - 95) * 42000

    Unrealized holding gain = 420000
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