Presented below is information related to the purchases of common stock by Sweet Company during...
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Accounting
Presented below is information related to the purchases of common stock by Sweet Company during 2017.
| Cost (at purchase date) | Fair Value (at December 31) | |||
| Investment in Arroyo Company stock | $92,000 | $74,000 | ||
| Investment in Lee Corporation stock | 265,000 | 312,000 | ||
| Investment in Woods Inc. stock | 178,000 | 189,000 | ||
| Total | $535,000 | $575,000 |
(Assume a zero balance for any Fair Value Adjustment account.)
| (a) | What entry would Sweet make at December 31, 2017, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? | |
| (b) | What entry would Sweet make at December 31, 2017, to record the investments in the Lee and Woods corporations, assuming that Sweet did not select the fair value option for these investments? |
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