Business, 08.04.2020 03:32 chycooper101

Skywalker limited shares of jedi jewellers during 2018 for $124000. Skywalker elected the air value option for accounting for this investment. At year end 208, 2019 and 2020 this investment has a fair value of $120000, $128000 and 138000. What is the amount of unrealized gain or loss reported on this investment at year end 2020

Answers

The unrealized gain is $10,000 in the year 2020

Explanation:

The unrealized gain to be recorded in the year 2020 is the movement in fair values between 2019 to 2020, in other words the difference the fair value in 2020 and that of 2019.

The rationale is that at the end of 2019 the shares would have been shown in the balance sheet at $128,000 and at $138,000 in 2020,hence the movement between the two values is $10,000.

2020 fair value $138,000

2019 fair value ($128,000)

unrealized gain $10,000

The unrealized gain is $10,000

Answer from: Quest

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Answer from: Quest

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Skywalker limited shares of jedi jewellers during 2018 for $124000. Skywalker elected the air value...