FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On its December 31, 2020,
Unrealized loss of P10,000
Unrealized gain of P20,000
Nil
Realized gain of P20,000
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- On its December 31, 2020 balance sheet, a company correctly reported a $89,000 debit balance in its Fair Value Adjustment (Available-for-Sale) account. There was no change during 2021 in the composition of the company’s portfolio of available-for-sale securities. At the end of 2021, the following information pertains to the portfolio: Cost at 12/31/21 Fair value at 12/31/21 $269,000 $154,000 The unrealized gain/loss to appear as a component of comprehensive income for the year ending December 31, 2021 is $____________. (Very Important: if you obtain an unrealized holding loss, then you need to put a minus sign in front of the amount. If you obtain an unrealized holding gain, then no plus or minus sign is needed.)arrow_forwardSome of Cullumber Lake Limited's investment securities are classified as trading securities and some are classified as non- trading. The cost and fair value of each category at December 31, 2020, were as follows. Trading securities Nokn-trading securities Cost ¥96,500 ¥59,500 Fair Value ¥85,000 $64,000 Unrealized Gain (Loss) ¥(11,500 ) ¥4,500 At December 31, 2019, the Fair Value Adjustment-Trading account had a debit balance of ¥2,600, and the Fair Value Adjustment-Non-Trading account had a credit balance of ¥6,200. Prepare the required journal entries for each group of securities for December 31, 2020.arrow_forwardAt the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $35,000 $34,200 $(800) Nance Company 50,000 53,100 3,100 Totals $85,000 $87,300 $2,300 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $98,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $33,000 plus interest of $1,300. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $55,000; Oscar…arrow_forward
- Pina Colada Corp. has income from continuing operations of $413,000 for the year ended December 31, 2022. It also has the following items (before considering income taxes). 1. An unrealized loss of $64,600 on available-for-sale securities. 2. A gain of $26,400 on the discontinuance of a division (comprised of a $9,100 loss from operations and a $35,500 gain on disposal). Assume all items are subject to income taxes at a 20% tax rate.Prepare a partial income statement, beginning with income from continuing operations, and a statement of comprehensive income. PINA COLADA CORP.Partial Income Statement choose the accounting period select an income statement item $enter a dollar amount select an income statement item select an income statement item…arrow_forwardWindsor, Inc. has an investment in trading securities of $151000. This investment experienced an unrealized loss of $8100 during the current year. Assuming a 33% tax rate, the amount of this loss that would reported as part of other comprehensive income would be:arrow_forwardThe trial balance for Blue Bell Company for the year ended December 31, 2019 included the following accounts: Sales revenue = $320,000 Cost of goods sold = $195,000 Selling and administrative expenses = $110,000 Interest income = $88,000 Other expenses = $70,000 Gain on derivatives = $43,650 Gain on investment securities = $26,700 The gains on derivatives and investment securities are unrealized and classified as other comprehensive income Each component of other comprehensive income should be calculated net of tax Blue Bell's income tax rate on all items is 30% Calculate the following amounts for the company’s 2019 statement of comprehensive income (round all answers to the nearest dollar amount): 1. Gross profit = 2. Net income = 3. Gain on derivatives =arrow_forward
- Sheridan Corporation has income from continuing operations of $278,000 for the year ended December 31, 2022. It also has the following items (before considering income taxes). An unrealized loss of $74,000 on available-for-sale securities. 2. Again of $25,000 on the discontinuance of a division (comprised of a $19,000 loss from operations and a $44,000 gain on disposal). Assume all items are subject to income taxes at a 15% tax rate. Prepare a partial income statement, beginning with income from continuing operations, and a statement of comprehensive income. (Enter loss using either a negativign preceding the number eg.-2,945 or parentheses e.g. (2.945)) Income from Continuing Operations Discontinued Operations Gain from Disposal, Net of Income Taxes SHERIDAN CORPORATION Income Statement (Partial) For the Year Ended December 31, 2022 Ines from nortinne Nat of Income Tay Saunas 37400 16150 278000arrow_forwardAt December 31, 2020, the available-for-sale debt portfolio for Crane, Inc. is as follows. Security A B C Total Previous fair value adjustment balance-Dr. Fair value adjustment- Dr. Cost $17,500 12,200 500 Fair Value $1,300 $15,000 23,400 25,700 $53,100 $54,900 14,200 Unrealized Gain (Loss) $(2,500 2,000 2,300 1,800 ) On January 20, 2021, Crane, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees. Crane, Inc. reports net income in 2020 of $118,000 and in 2021 of $143,000. Total holding gains (including any realized holding gain or loss) equal $49,000 in 2021. Prepare a statement of comprehensive income for 2020, starting with net income. Prepare a statement of comprehensive income for 2021, starting with net income. Please show underlying calculations (especially for reclassification adjustment for 2021). I correctly identified the statement of income for 2020, but am stuck on the one for 2021. Thank you!arrow_forwardMetlock, Inc. has an investment in trading securities of $155000. This investment experienced an unrealized loss of $8500 during the current year. Assuming a 34% tax rate, the amount of this loss that would reported as part of other comprehensive income would be: None. $52700 loss. $102300 loss. $155000 loss.arrow_forward
- Marigold Corp. has income from continuing operations of $219,000 for the year ended December 31, 2020. It also has the following items (before considering income taxes). Anunrealized loss of $72,600 on available-for-sale securities. 1. Again of $27,600 on the discontinuance of a division (comprised of a $6,400 loss from operations and a $34,000 gain on disposal). 2. Assume all items are subject to income taxes at a 15% tax rate. Prepare a statement of comprehensive income, beginning with income from continuing operations. MARIGOLD CORP. Partial Statement of Comprehensive Income $ $arrow_forwardOn December 31, 2024, Oriole Company purchased debt securities as trading securities. Pertinent data are as follows: Fair Value Security Cost At 12/31/25 A $128400 $114500 B 167500 182400 C 284400 258500 On December 31, 2025, Oriole transferred its investment in security Ċ from trading to available-for-sale because Oriole intends to retain security C as a long-term investment. What total amount of gain or loss on its securities should be reported in Oriole's income statement for the year ended December 31, 2025? O $24900 loss O $1000 gain O $25900 loss O $39800 lossarrow_forwardOn its December 31, 2020, balance sheet, Trump Company reported its investment in equity securities, which had cost $600,000, at fair value of $560, 000. At December 31, 2021, the fair value of the securities was $585, 000. What should Trump report on its 2021 income statement as a result of the increase in fair value of the investments in 2021? a. 50. b. Unrealized loss of $15,000. c. Realized gain of $25, 000. d. Unrealized gain of $25,000.arrow_forward
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