Required:-1. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December 31,year 1.a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statementsat December 31, year 1.b. Prepare journal entries to record the transactions on April 10 and August 7.c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the MarketableSecurities control account.c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) onInvestments account.d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2.e. Prepare the fair value adjusting entry required at December 31, year 2.f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2.f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2.g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step incomestatement and show the caption identifying the section in which this amount would appear.AComplete this question by entering your answers in the tabs below.Req A1Req A2Req BReq C1< Prev...Req C2www.?Req D3 of 3Req EPrepare the fair value adjusting entry required at December 31, year 2. (If no entry is required for a transaction/event, select "NoHelp Save & Exit SubmitNextONReq F1PReq F2Req G9/17 xt sec iAt December 31, year 1, Charter Holding Co. owned the following marketable securities in capital stock of publicly tradedcompanies.L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52)The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39)SavedOIn year 2, Charter engaged in the following two transactions.Apr.10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of$100.PrevCATAug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of$150.At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Inc., $37 per share.Required:a-1. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December 31,year 1.a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statementsat December 31, year 1.3 of 3@Help Save & ExitCost$ 220,000168,000$ 388,000NextOUCurrentMarketValue$ 260,000156,000$ 416,000PSubr

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At December 31, year 1, Charter Holding Co. owned the following marketable securities in capital stock of publicly traded companies. L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52) The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39) In year 2, Charter engaged in the following two transactions. Apr.10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Inc., $37 per shar < Prev ************* Required: a-1. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December year 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statemer at December 31, year 1. 3 of 3 Cost $ 220,000 168,000 $ 388,000 ‒‒‒ www Current Market Value $ 260,000 156,000 $ 416,000 Next

At December 31, year 1, Charter Holding Co. owned the following marketable securities in capital stock of publicly traded companies. L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52) The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39) In year 2, Charter engaged in the following two transactions. Apr.10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Inc., $37 per shar < Prev ************* Required: a-1. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December year 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statemer at December 31, year 1. 3 of 3 Cost $ 220,000 168,000 $ 388,000 ‒‒‒ www Current Market Value $ 260,000 156,000 $ 416,000 Next

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 15.4CPP: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,...

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
The following transactions appear on the equity investments at fair value through profit or loss account of THE EAST Corporation Date Particulars Debit Credit 03/1/x6 Purchased 40,000 shares of ABCD at P 30.75/share and 20,000 shares of Benpress at P 23/share Purchased CTRL 15% bonds, face value P 4,000,000. Interest dates July 1 and Jan 1. Maturity date July 1, 20x9 Sold 14,400 shares of ABCD at P 30/share And 4,000 shares of Benpress at P 25/share Sold PAG-IBIG bonds at 98 plus accrued interest P 1,690,000 07/03/x6 4,000,000 11/5/x6 P532,000 4,220,000 12/31/x6 i. On October 1,20x6 THE EAST received 8,000 shares of ABCD as stock dividend i. Benpress declared a 15% stock dividend to all stockholders of record as of November 15, 20x6 payable on December 1,20x6 REQUIRED: Based on the data above, how much is the adjusted balance of THE EAST'S equity investments at fair value through profit or loss as of December 31, 2016?
Fair value journal entries, trading investmentsThe investments of Charger Inc. include a single investment: 14,500shares of Raiders Inc. common stock purchased on February 24, Year 1,for $38 per share including brokerage commission. These shares werelassified as trading securities. As of the December 31, Year 1, balancesheet date, the share price had increased to $42 per share. a. Journalize the entries to acquire the investment on February 24 andrecord the adjustment to fair value on December 31, Year 1.b. How is the unrealized gain or loss for trading investments reported onthe financial statements?
Question Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 X $25 $387,500 BVD Company 20,000 x$18 |S360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company IS19 $23 BVD Company $22 $28 REQUIREMENTS: ( Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo…
The following transactions appear on the Equity investments at fair value through profit or loss account of Chicker Corporation Date Particulars Debit Credit 03/1/x6 Purchased 40,000 shares of PLDT at P 30.75/share and 20,000 shares of Benpress at P 23/share P 1,690,000 07/03/x6 Purchased PAG-IBIG 15% bonds, face value P 4,000,000. Interest dates July 1 and Jan 1. Maturity date July 1, 20x9 4,000,000 11/5/x6 Sold 14,400 shares of PLDT at P 30/share And 4,000 shares of Benpress at P 25/share P532,000 12/31/x6 Sold PAG-IBIG bonds at 98 plus accrued interest…
Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 860 $43,602 Pavlov Co. 2,330 61,512 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $60 per share and the Pavlov Co. stock had a market value of $48 per share. Galileo Company had net income of $337,400 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. available for sale investments at cost/available for sale investments at fair value/common stock/retained earning/unrealized gain (loss) on available for sale investments/less retained earning/less unrealized gain (loss) on available for sale /plus retained earnings/plus unrealized gain (loss) on available/plus valuation allowance for available for sale/less unrealized gain…
Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 860 $43,602 Pavlov Co. 2,330 61,512 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $60 per share and the Pavlov Co. stock had a market value of $48 per share. Galileo Company had net income of $337,400 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: $fill in the blank 6f30cb02405dfbc_2 Plus Unrealized Gain (Loss) on Available-for-Sale Investments fill in the blank 6f30cb02405dfbc_4 $fill…
Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 760 $34,124 Pavlov Co. 2,060 48,204 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $53 per share and the Pavlov Co. stock had a market value of $42 per share. Galileo Company had net income of $264,300 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: $ $ b. Prepare the Stockholders' Equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for…
Blossom Inc had these transactions pertaining to investments in common stock Jan 1 Purchased 1,290 sares of Gate Corporation stick(5% of outstanding shares)for $64500 cash July 1 Received a cash dividend of $8 per share Dec 1 Sold 860 shares of Gate crppration commonstock for 44,720 cash Dec 31. Received a cash dividwnd of $8 per share journalize the transactions
please prepare the journal entries Q1. Sold 22,500 Treasury shares at $2 each. Q2. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to Q1 of additional information.) Q3. A 10% share dividend was declared when the market value per share was $2.1. Q4. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus.
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 8,100 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $10 per share. CashCash DividendsInterest ReceivableInvestments-Bengals Inc. StockRetained EarningsUnrealized Gain (Loss) on Available-for-Sale InvestmentsValuation Allowance for Available-for-Sale Investme a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1. Year 1 Sept. 12 fill in the blank fb2219094fa204f_2fill in the blank fb2219094fa204f_4Year 1 Dec. 31 fill in the blank fb2219094fa204f_6fill in the blank fb2219094fa204f_8b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial…
All securities purchases made by Mechanical Engineers, Inc. described in this problem represent less than a 20% interest in the investee companies. Part I: Mechanical Engineers, Inc. made the following purchases of equity securities during 20X7, the first year any investments were made: Investee Company Cost per per share during 20X7* Number of shares purchased Total Cost Market value per share on Dec. 31, 20X7 Total Market Value on Dec. 31, 20X7 W Co.** $11.00 500 $5,500 $14.00 $7,000 X Co.*** $18.00 1,000 $18,000 $17.00 $17,000 $23,500 $24,000 * Costs per share include broker’s fees and commissions.** Received $50 dividend during 20X7 from W Co.*** Received $200 dividend during 20X7 from X Co. Mechanical Engineers, Inc. intends to sell the W Co. and X Co. investments in the short term in an open market. Mechanical Engineers, Inc. adjusts its allowance account for securities valuation annually at the…