On January I of Year 1, Steve Company purchased the following securities. Security Type Classification Cost $ 5,00 Bond Trading B Stock Trading 27,500 Stock Available for sale $10,000 Bond Available for sale 17,000 Stock Available for sale 9,200 Steve Company sold all of its investment in Security D for $8,900 on October 31 of Year 1. On December 31 of Year 1, the following fair values were available for Securities A, BC, and E (with Security D having been sold on October 31). Cost Market Value(end Year 1) 5 5,000 Security Type Classification Bond Trading $3.00 Stock Trading 27,500 36,700 Stock Available for sale s10,000 $14,000 Stock Available for sale 9,200 6,000 Compute the TOTAL amount of net UNrealized gain or loss that will be reported in Steve Company's OTHER COMPREHENSIVE INCOME for Year 1. O Net gain $8.200 O Net gain of $6,000 O Net gain $9,000 O Net gain of $7,400 O Net gain of $800 FEEDBACK 0/1 (0.0%)

On January I of Year 1, Steve Company purchased the following securities. Security Type Classification Cost $ 5,00 Bond Trading B Stock Trading 27,500 Stock Available for sale $10,000 Bond Available for sale 17,000 Stock Available for sale 9,200 Steve Company sold all of its investment in Security D for $8,900 on October 31 of Year 1. On December 31 of Year 1, the following fair values were available for Securities A, BC, and E (with Security D having been sold on October 31). Cost Market Value(end Year 1) 5 5,000 Security Type Classification Bond Trading $3.00 Stock Trading 27,500 36,700 Stock Available for sale s10,000 $14,000 Stock Available for sale 9,200 6,000 Compute the TOTAL amount of net UNrealized gain or loss that will be reported in Steve Company's OTHER COMPREHENSIVE INCOME for Year 1. O Net gain $8.200 O Net gain of $6,000 O Net gain $9,000 O Net gain of $7,400 O Net gain of $800 FEEDBACK 0/1 (0.0%)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $693,000. The fair value of the securities on December 31, 20Y7, is $924,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 20Y7 Dec. 31 b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant). Unrealized losses would be in determining net income, while unrealized gains would be in determining net income... c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements? The unrealized gain on available-for-sale investments would be reported as The debit balance of Valuation…
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