Rozo company carries the following investments on its books at December 31, 2005, and December 31,...

Rozo company carries the following investments on its books at December 31, 2005, and December 31, 2006. All securities were purchased during 2005.

Trading Securities:

Company	Cost	Value December 31, 2005	Value December 31, 2006
A Company	$25,000	$13,000	$20,000
B Company	$13,000	$20,000	$20,000
C Company	$35,000	$30,000	$25,000

Available for Sale Securities:

Company	Cost	Value December 31, 2005	Value December 31, 2006
X Company	$210,000	$130,000	$50,000
Y Company	$50,000	$60,000	$70,000

A. Prepare the necessary journal entries for Rozo company on December 31, 2005, and December 31,2006.B. What net effect would the valuation of these stock investments have on 2005 net income?On 2006 net income?

Expert Solution

ekkarill92 answered 2 years ago

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