The information on the following page is available for Barkley Company at December 31, 2003, regarding its investments.
Cost Fair Value
3,000 shares of Myers Corporation Common Stock 40,000 48,000
1,000 shares of Cole Incorporated Preferred Stock 25,000 22,000
65,000 70,000
Instructions
(a) Prepare the adjusting entry (if any) for 2003, assuming the securities are classified as trading.
(b) Prepare the adjusting entry (if any) for 2003, assuming the securities are classified as available.
(c) Discuss how the amounts reported in the financial statements are affected by the entries in (a) and (b).