2. Edwards Company began business in February of 2021. During the year,Edwards purchased the three trading securities listed below. On its December 31,2021, balance sheet, Edwards appropriately reported a P4,000 credit balance inits Market Adjustment-Trading securities account. There was no change during2022 in the composition of Edward's portfolio of trading securities. Pertinent dataare as follows:SecurityABсCostP120,00090,000160,000P370,000Fair Value12/31/22P126,00080,000157,000P363,000What amount of loss on these securities should be included in Edward's incomestatement for the year ended December 31, 2022?d. P0|a. P11,000b. P7,000c. P3,000

Based on the prevailing market fair value and the cost of securities, the unrealized profit/loss in…

Answered: 2. Edwards Company began business in…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Assume General Motors announced a quarterly profit of $119 million for 4th quarter 2022. Below is a portion of its balance sheet. Conduct a horizontal analysis of the following line items. Note: Negative answers should be indicated by a minus sign. Round the "percent" answers to the nearest hundredth percent. Cash and cash equivalents Marketable securities Inventories Goodwill Total liabilities and equity 2022 (dollars in millions) $ $ 2021 (dollars in millions) 15,980 9,222 13,642 0 103,249 $ $ 15,499 16,148 14,324 1,278 144,603 Difference % Change
On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $15,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $13,000. The December 31, 2018, balance sheet showed the following: Marsh Company Partial Balance Sheet December 31, 2018 1 Assets 2 Investment in Available-for-Sale Securities $15,000.00 3 Less: Allowance for Change in Fair Value of Investment (2,000.00) 4 $13,000.00 5 Shareholders’ Equity: 6 Unrealized Holding Gain/Loss $(2,000.00) On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $17,000 for $17,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 19,000…
am. 82.
1.Gassy Stores sells $400,000 of 12% bonds on June 1, 2022. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2026. The market rate of similar investments is 10%. On December 1, 2024, Gassy Stores retired the bond for $400,000. The company closes its books on December 31. Requirements: (Show all workings) A.Calculate the proceeds from the sale of the bond. Clearly show the amount of the premium or discount and state two reasons which support the premium or discount calculated. B.Prepare a bond amortization schedule for the bond’s life C.Prepare all the journal entries for 2022, 2023 & 2024.
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 100 Grocers' Supply Corporation bonds at par for $350,000. December 28, 2024 Received interest of $2,000 from the Grocers' Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation bonds. The market price of the bond was $4,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $395,000. Required: 1. Prepare the appropriate journal entry or entries for each transaction. 2. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…
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On June 1, 2019, Hansen Company purchased twenty $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2020, Francisco experienced financial difficulties and on Dec 31, 2020, based on an evaluation of the investment, Hansen determined that expected credit losses are $4,200. In 2021, Francisco improved its financial condition, and, on Dec 31, 2021, Hansen believed that expected credit losses would only be $2,100. Required: Prepare the journal entries for Hansen to record the above events under U.S. GAAP.
Please help with problem. At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/19 Fair Value A $25,000 $31,000 B 38,000 36,000 Totals $63,000 $67,000 During 2019, the following transactions occurred: Transactions: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $31,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the B and C securities. Additionally the following information was available: Security 12/31/19 Fair Value B $42,000 C 53,000 Required: 1. Prepare journal entries to record the preceding information. 2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2019? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses…
1. ABC Company has the following liabilities as of December 31, 2018 a. Trade accounts payable, net of debit balance in supplier's account of P5 000, net of unreleased checks of P4 000, and net of postdated checks of P2 000. 100 000 b. Credit balance in customers' accounts 2 000 c. Financial liability d. Bonds payable (maturing in 10 equal annual install- ments of P100 000) e. 12%, 5-year note payable issued on October 1, 2018 f. Deferred tax liability g. Unearned rent h. Contingent liability i. Reserve for contingencies 50 000 1 000 000 100 000 5 000 4 000 10 000 25 000 Requirement: How much is the total current liabilities?
Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2024 and the first week of 2025. December 17, 2024 Purchased 195 Grocers’ Supply Corporation bonds at par for $487,500. December 28, 2024 Received interest of $5,800 from the Grocers’ Supply Corporation bonds. December 31, 2024 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $3,000 per bond. January 5, 2025 Sold the Grocers' Supply Corporation bonds for $546,000. Prepare the appropriate journal entry or entries for each transaction. Indicate any amounts that Rantzow-Lear Company would report in its 2024 balance sheet and income statement as a result of this investment. Ignore income…
Requ a. Using the present value tables in Chapter 6, calculate the proceeds (issue price) of Learned, Inc.'s, bonds on January 1, 2013, assuming that the bonds were sold to provide a market rate of return to the investor. b. Assume instead that the proceeds were $93,000,000. Use the horizontal model (or write the journal entry) to record the payment of semiannual interest and the related premium amortization on June 30, 2013, assuming that the premium of $3,000,000 is amortized on a straight-line basis. o 0ompound interest method
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