Let's break down the problem step by step using the provided information. --- ### **1. Given Data** #### **Investments made by Spencer Company during 2025:** | Investment | Cost | Fair Value (Dec 31) | |--------------------------|---------|---------------------| | Arrow Company stock | $96,000 | $77,000 | | Wabash Inc. stock | $78,000 | $87,000 | | **Total** | $174,000| $164,000 | #### **Investment in Fargo Company stock (held since 2004):** | Investment | Cost | Fair Value (Dec 31) | |--------------------------|---------|---------------------| | Fargo Company stock | $396,000| $525,000 | --- ### **2. Required Calculations** #### **(a) Net unrealized gain or loss at December 31, 2025 for 2025 investments (Arrow & Wabash):** **Formula:** Net Unrealized Gain/Loss = Total Fair Value (Dec 31) - Total Cost - **Total cost (2025 investments):** $96,000 (Arrow) + $78,000 (Wabash) = **$174,000** - **Total fair value (Dec 31, 2025):** $77,000 (Arrow) + $87,000 (Wabash) = **$164,000** **Calculation:** \[ \text{Net Unrealized Gain/Loss} = \$164,000 - \$174,000 = \boxed{(\$10,000)\ \text{(Unrealized Loss)}} \] --- #### **(b) Net unrealized gain or loss to be reported at December 31, 2025 for all investments (including Fargo):** - **Total cost (all investments):** $174,000 + $396,000 = **$570,000** - **Total fair value (all investments):** $164,000 + $525,000 = **$689,000** **Calculation:** \[ \text{Net Unrealized Gain/Loss} = \$689,000 - \$570,000 = \boxed{\$119,000\ \text{(Unrealized Gain)}} \] --- #### **(c) Net unrealized gain or loss to be reported at December 31, 2024 for all investments (including Fargo):** - **Wabash stock was not owned before 2025.** - **Arrow stock cost/fair value at Dec 31, 2024:** Cost = $96,000, Fair value = $82,000 - **Fargo stock at Dec 31, 2024:** Cost = $396,000, Fair value = $453,000 - **Total cost (2024):** $96,000 (Arrow) + $396,000 (Fargo) = **$492,000** - **Total fair value (2024):** $82,000 (Arrow) + $453,000 (Fargo) = **$535,000** **Calculation:** \[ \text{Net Unrealized Gain/Loss} = \$535,000 - \$492,000 = \boxed{\$43,000\ \text{(Unrealized Gain)}} \] --- ### **Summary Table** | Year | Total Cost | Total Fair Value | Unrealized Gain/Loss | |-----------|------------|------------------|----------------------| | 2024 | $492,000 | $535,000 | $43,000 Gain | | 2025 | $570,000 | $689,000 | $119,000 Gain | --- ## **Final Answers** **(a) Net unrealized loss for 2025 investments at Dec 31, 2025:** \[ \boxed{(\$10,000)\ \text{Unrealized Loss}} \] **(b) Net unrealized gain for all investments at Dec 31, 2025:** \[ \boxed{\$119,000\ \text{Unrealized Gain}} \] **(c) Net unrealized gain for all investments at Dec 31, 2024:** \[ \boxed{\$43,000\ \text{Unrealized Gain}} \] If you need journal entries or further explanation, let me know!