Let's solve the problem step by step: --- ### **Given Information** #### **Investments in Common Stock (2025)** | | Cost | Fair Value (12/31) | |-----------|-----------|-------------------| | Avco | $36,000 | $26,000 | | Woden | $19,000 | $17,000 | | **Total** | **$55,000** | **$43,000** | #### **Investments in Common Stock (2024)** | | Cost | Fair Value (12/31) | |-----------|-----------|-------------------| | Avco | $39,000 | $37,000 | | Woden | $18,000 | $19,000 | | **Total** | **$57,000** | **$56,000** | --- ### **Questions** #### **(a) Net Unrealized Gain or Loss for 2025** **Formula:** Net unrealized gain/loss = Fair Value (end of year) - Cost (end of year) - **Cost at 12/31/2025:** $55,000 - **Fair value at 12/31/2025:** $43,000 \[ \text{Net Unrealized Gain/Loss} = \$43,000 - \$55,000 = -\$12,000 \] **Explanation:** This is a net unrealized loss, as the fair value is less than the cost. --- #### **(b) Net Unrealized Gain or Loss for 2024** - **Cost at 12/31/2024:** $57,000 - **Fair value at 12/31/2024:** $56,000 \[ \text{Net Unrealized Gain/Loss} = \$56,000 - \$57,000 = -\$1,000 \] **Explanation:** This is a net unrealized loss, as the fair value is less than the cost. --- #### **(c) Net Unrealized Gain or Loss Reported in 2025 Income Statement** **Formula:** Unrealized Gain/Loss in 2025 = (Fair Value at 12/31/2025 - Cost at 12/31/2025) - (Fair Value at 12/31/2024 - Cost at 12/31/2024) Or, more simply, it's the change in the unrealized gain/loss from 2024 to 2025. - 2025 Unrealized Loss: $-12,000 - 2024 Unrealized Loss: $-1,000 \[ \text{Change in Unrealized Gain/Loss} = (-\$12,000) - (-\$1,000) = -\$11,000 \] **Explanation:** This $11,000 net unrealized loss will be reported on the 2025 income statement. --- ### **Final Answers** **(a)** Net unrealized gain or loss for 2025: **$-12,000 (loss)** **(b)** Net unrealized gain or loss for 2024: **$-1,000 (loss)** **(c)** Net unrealized gain or loss reported in 2025 income statement: **$-11,000 (loss)** --- If you need the journal entries or further explanation, let me know!