The Allowance to Adjust Investment in Available-for-Sale Securities to Market account has a current credit balance of $1200 after the adjustment at year-end. Available-for-sale investments have a fair value of $21,000. The original cost of the investments was $22,200. The carrying value of the investments is:

Question

Quizplus · Accepted Answer

The carrying value of the investments is the original cost plus the unrealized gain or minus the unrealized loss. In this case, the unrealized gain is $21,000 - $22,200 = -$1,200. Therefore, the carrying value of the investments is $22,200 - $1,200 = $21,000.

The Allowance to Adjust Investment in Available-For-Sale Securities to Market