On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income

On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 25SP

See similar textbooks

Similar questions

. During 2019, Blackpink Company purchased marketable equity securities to be measured at fair value through other comprehensive income. On December 31, 2019, the balance in the unrealized loss on these securities was P200,000. There were no security transactions during 2020. Pertinent data on December 31, 2020 are: Cost Security Value Marketable A 2,100,000 1,600,000 1,850,000 2,000,000 C 1,050,000 900,000 In the statement of changes in equity for 2020, what amount should be included as cumulative unrealized loss as component of other comprehensive income? *
Problem 19: 56. On its December 31, 2020 balance sheet, Polo Company reported securities measured at fair value through other comprehensive income. These securities were acquired at a cost P360,000 and had a year-end fair value of P330,000. On December 31, 2021, the fair value of the securities was P350,000. What should Polo report as 2021 income or loss in the profit or loss statement as a result of the change in market value? Problem 20: Fastfoods Company acquired the following investments classified as trading securities on August 20, 2020: Jolibee shares KFC shares 400,000 250,000 300,000 P McDonald shares On December 31, 2020, the close of the year, these investments had the following market values: Jolibee shares KFC shares 450,000 220,000 310,000 McDonald shares 57. On February 23, 2021, Fastfoods company sold the KFC shares for P230,000. How much would berecognized as gain/ (loss) on sale of securities on the sale of the KFC shares as a component of other comprehensive income?
On January 1, 2020, Maya Company appropriately reported a credit balance of P125,000 (before income tax effect) in the fair value adjustment account in conformity with the valuation of investment to other comprehensive income. There was no change during 2020 in the composition of the portfolio of equity security Investments. Pertinent data on December 31, 2020 as follows:Securities Cost MarketC PI,500,000 PI,625,000P 1,250,000 1,300,000A 2,250,000 2,350,000Total P5,000,000 P5,275,000What amount of unrealized gain or loss on these securities should the company report in its 2020 statement of comprehensive income, ignore income tax effect? a. none b. 375,000 c. 400,000 d. 625,000
On January 1, 2020, Maya Company appropriately reported a credit balance of P125,000 (before income tax effect) in the fair value adjustment account in conformity with the valuation of investment to other comprehensive income. There was no change during 2020 in the composition of the portfolio of equity security Investments. Pertinent data on December 31, 2020 as follows:Securities Cost MarketC PI,500,000 PI,625,000P 1,250,000 1,300,000A 2,250,000 2,350,000Total P5,000,000 P5,275,000 What amount of unrealized gain on these securities should the company report in its 2020 shareholders' equity? a. none b. 275,000 c. 400,000 d. 625,000
A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities and $60,000 as AFS securities. It sells the securities in 2023. Required For each of the following scenarios, indicate the net effect on income and other comprehensive income in each year 2022 and 2023. In each case, any unrealized decline in value below cost is expected to be recovered and is attributed to market factors. a. Fair value, end of 2022 Selling price, 2023 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI End of 2022 $ 2023 b. Trading securities AFS securities $38,000 $65,000 43,000 64,000 Income Fair value, end of 2022 Selling price, 2023 End of 2022 $ 2023 (2,000)✓ $ 9,000 ✓ Trading securities AFS securities $45,000 $56,000 42,000 68,000 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI (4,000) ✔ 0 x 5,000 ✓ 0 x Income 5,000 $ 5,000 ✓
During 2019, XYZ Co. purchased marketable equity securities to be measured at fair value thru other comprehensive income. On December 31, 2019, the balance of unrealized loss was P75,000. There were no security transactions during 2020. Pertinent data on December 31, 2020 are as follows: Security Cost Market Value АВС P1,000,000 850,000 950,000 P900,000 800,000 1,000,000 DEF MNO In the statement of changes in equity for 2020, how much should be included as cumulative unrealized loss as component of other comprehensive income?
Consider the following worksheet with information extracted from a financial statement:2020 Assets Liabilities EquityReported (P) 400 000 100 000 300 000You identify that a firm has incorrectly recognized revenue on P50 000 worth of goods in the form of receivables. You decide to reverse this sale and the associated inventory which has a value of P40 000. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?
Consider the following worksheet with information extracted from a financial statement:2018 Assets Liabilities EquityReported (P) 500 000 100 000 400 000An analyst makes an adjustment that decreases goodwill by P100 000 and equity (profit) by P100 000. This goodwill was acquired on consolidation, hence there are no tax adjustments. Using the worksheet approach, what would be the change in the debt to assets ratio?
On January 1, 2020, May Company appropriately reported a debit balance of P125,000 (before income tax effect) in the fair value adjustment account on its investment to other comprehensive Income, There was no change during 2020 in the composition of the portfolio of investments. Pertinent data on December 31, 2020 are as follows:Securities Cost MarketC Pl,500,000 PI,475,000P 1,250,000 1,000,000A 2,250,000 1,750,000Total P5,000,000 P4,225,0001. By what amount the equity securities had decreased during 2020? a. none b. 125,000 c. 775,000 d. 900,000 2. What amount of unrealized loss should May company report in December 31,2020 shareholder's equity related to its investment, ignore income tax? a. none b. 125,000 c. 775,000 d. 900,000
Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025. Amortized cost Fair value Expected credit loss (a) $50,800 41,600 12.450 Your answer is correct. What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do not leave any answer field blank. Enter O for amounts.) Amount of the credit loss. $ 9200
The 2018 annual report of Bristol-Myers Squibb reveals that the company maintains a large investment in available-for-sale securities. Did the company's available-for-sale securities experience a gain or loss in value in 2018 and/or 2017, and if so, in what amount? How did the company account for these gains and/or losses? Were these gains (losses) taxable (tax deductible) in 2018 and/or 2017?
On December 31, 2019, Belle Company appropriately reported a P100,000 unrealized loss. There was no change in 2020 in the composition of Belle’s portfolio of Investments in equity securities held as financial asset at fair value through other comprehensive income. Pertinent data are as follows: Security Cost Market value December 31, 2020 A 1,200,000 1,300,000 B 900,000 500,000 C…