Question

16.10

102,3/ d 10% of the 200,000 shares of common stock of Nevins Fashion at on March 18, 2020. On June 30, Nevins declared and paid a $60,000 31. Nevins reported net income of $122,000 for the year. At December 31, Cosmetics acquired 109 cost of $13 per share on d. On December 31. Nevi Jour and es Can Alcatel dendo ce of Nevins Fashion was $15 per share, the market price of N K . Inc., obtained signifi 200 outstanding shares of com 15. Rogan declared and paid bignificant influence over Rogan Corporation by buying 40% of Rogan's of common stock at a total cost of $9 per share on January 1, 2020. On ad paid a cash dividend of $30,000. On December 31, Rogan reported a me of $80,000 for the year. net income of $80 structions journal entries for 2020 for (a) Gambino Cosmetics and (b) Kanza. Inc. See all the necessary journal riting Agee Company purchased 70% of the outstanding common stock of Himes A TIKLO 2) Writing Under paration structions Explain the relationship between Agee Company and Himes Corporation. How should Agee account for its investment in Himes? Why is the accounting treatment described in (b) useful? E1.10 [LO 3) Financial Statement At December 31, 2020, the trading debt securities for Stoerer. ht. are as follows. Security Cost $17.500 12,500 23.000 $53,000 Fair Value $16,000 14.000 21.000 $51.000 Instructions Prepare the adjusting enti Show the balance sheet and in ng entry at December 31, 2020, to report the securities at fair value income statement presentation at December 31, 2020, after adjustment Prep to fair value. (L03) Financial Stateme 31 e de are presented in E16.10. Assum securities ement Writing Data for debt investments classified as trading 1. Assume instead that the investments are classified as available he same cost and fair value as indicated in E16 10. The securities dered to be a long-term in ies. They have the same cost and ta "9-term investment. ructions Prebe e the adjusting entry at Decembe Show the stateme 1. Ε. Κασή alement presentation at December December 31, 2020, to report the securities at fair value. December 31, 2020, after adjustment to fair value. fors, does not understand the reporting of the unreal ning the reporting and the purposes that 11.2020

Answer 1

a)

Credit Debit $2.000 Date Account Title Dec 31, 2020 Unrealized Gain or Loss-Income Fair value Adjustment-Trading (553,000 - $51,000) $2.000

b)

Storer Inc. Balance Sheet (partial) December 31, 2020 Current assets: Short term securities (at fair value) $51,000 Storer Inc. Income Statement (partial) For the year ended December 31, 2020 Other Expenses and losses: Unrealized loss on trading securities ($2.000)