Homework Answers
Unrealized gain or loss arising on investment available for sale is recorded in Statement of Comprehensive Income for the year.
1) Option C: Unrealized gain on available for sale securities would increase the comprehensive income.
Comprehensive income represents both Unrealised gain/loss along with tax effect.
2) Option D Loss of $36,400.
Total loss = 56000; Tax rate = 35%
In this unrealized loss arose, therefore, tax-saving occurs which is 56000*35% = 19,600.
Net amount in comprehensive income = 56,000 - 19,600 = $36,400
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Problem 17-9 On January 1, 2017, Shamrock Inc. had the following balance sheet. SHAMROCK INC. BALANCE...
Problem 17-9
On January 1, 2017, Shamrock Inc. had the following balance
sheet.
SHAMROCK INC.
BALANCE SHEET
AS OF JANUARY 1, 2017
Assets
Equity
Cash
$51,800
Common stock
$249,100
Debt investments (available-for-sale)
247,100
Accumulated other comprehensive income
49,800
Total
$298,900
Total
$298,900
The accumulated other comprehensive income related to unrealized
holding gains on available-for-sale debt securities. The fair value
of Shamrock Inc.’s available-for-sale debt securities at December
31, 2017, was $212,800; its cost was $151,800. No securities were
purchased during...
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Corinne's Cookie Company provided the following account balances from its year-end trial balance. During the year,Corinne...
Corinne's Cookie Company provided the following account
balances from its year-end trial balance.
During the year,Corinne
issued no-par common stock. The proceeds of the new issue were
$ 26 comma 000$26,000.
The company is subject to a 40% income tax rate. The beginning
balance in common stock was $ 450 comma 000$450,000.
Corinne’s Cookie Company
Trial Balance (Selected Accounts)
For the Current Year Ended December 31
Account
Debit
Credit
Retained Earnings, Beginning Balance
$1,403,000
Accumulated Other Comprehensive Income, Beginning Balance...
what do you mean 1:11 PM Sun Feb 9 20% C16 #2 Exercise 16-12a-b (Video) Cullumber...
what do you mean
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Problem 17-9
On January 1, 2017, Shamrock Inc. had the following balance
sheet.
SHAMROCK INC.
BALANCE SHEET
AS OF JANUARY 1, 2017
Assets
Equity
Cash
$51,800
Common stock
$249,100
Debt investments (available-for-sale)
247,100
Accumulated other comprehensive income
49,800
Total
$298,900
Total
$298,900
The accumulated other comprehensive income related to unrealized
holding gains on available-for-sale debt securities. The fair value
of Shamrock Inc.’s available-for-sale debt securities at December
31, 2017, was $212,800; its cost was $151,800. No securities were
purchased during...
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. $45,760 880 2,380 Pavlov Co. 64,498 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $62 per share and the Pavlov Co. stock had a market value of $49 per share. Galileo Company had net income of $353,900 and paid no dividends for the...
Question 10 (1 point) Which category of securities is presented on the balance sheet at amortized cost? Securities available for sale. Equity investments of less than 20 percent ownership Held-to-maturity securities. Trading securities Question 11 (1 point) Goofy Inc. bought a sizeable amount of Crazy Co.'s bonds for $150,000 on May 5. 2017, and classified the investment as available for sale. The market value of the bonds declined to $118.000 by December 31, 2017. Goofy reclassified this investment as trading...
Exercise 16-12 a-b (Video) Sheridan Company has the following data at December 31, 2020. Securities Trading Available-for-sale Cost $121,500 101,100 Fair Value $125,000 93,800 The available-for-sale securities are held as a long-term investment. Your answer is correct. Prepare the adjusting entries to report: (1) Trading securities at fair value and (2) Available-for-sale securities at fair value. (Credit acc entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit (1) Fair Value Adjustment-Trading...
Corinne's Cookie Company provided the following account
balances from its year-end trial balance.
During the year,Corinne
issued no-par common stock. The proceeds of the new issue were
$ 26 comma 000$26,000.
The company is subject to a 40% income tax rate. The beginning
balance in common stock was $ 450 comma 000$450,000.
Corinne’s Cookie Company
Trial Balance (Selected Accounts)
For the Current Year Ended December 31
Account
Debit
Credit
Retained Earnings, Beginning Balance
$1,403,000
Accumulated Other Comprehensive Income, Beginning Balance...
what do you mean
1:11 PM Sun Feb 9 20% C16 #2 Exercise 16-12a-b (Video) Cullumber Company has the following data at December 31, 2020. Securities Fair Value Trading Available for sale Cost $119,400 102,100 $126,900 90,500 The available-for-sale securities are held as a long-term investment Prepare the adjusting entries to report: (1) Trading securities at fair value and (2) Available-for-sale securities at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If...
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