>> Accounting Basics
Brooks Co. purchases various investments in trading securities at a cost of $ 66,000 on December 27, 2013. (This is its first and only purchase of such securities.) At December 31, 2013, these securities had a fair value of $ 72,000.
1. Prepare the December 31, 2013, year end adjusting entry for the trading securities portfolio.
2. Explain how each account in the entry of part 1 is reported in financial statements.
3. Prepare the January 3, 2014, entry when Brooks sells a portion of its trading securities (that had originally cost $ 33,000) for $ 35,000.