Skywalker Limited purchased shares of Jedi Jewelers during 2018 for $124,000. Skywalker elected the fair value option for accounting for this investment. At year end 2018, 2019, and 2020, this investment had a fair value of $120,000, $134,000, and $137,000, respectively. What is the amount of unrealized gain or loss reported on this investment at year-end 2020?

Question

Quizplus · Accepted Answer

The unrealized gain at year-end 2020 is calculated as the difference between the fair value at the end of 2020 ($137,000) and the fair value at the end of 2019 ($134,000), resulting in a gain of $3,000.

Skywalker Limited Purchased Shares of Jedi Jewelers During 2018 for $124,000