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2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes.

2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes.

FINANCIAL ACCOUNTING
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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Only need to answer question 2 ,please post how to get those amounts

Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024 including any year-end adjusting entries. 2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. 3. Prepare the appropriate journal entry for each transaction or event during 2025. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Balance sheet: Current Assets Answer is not complete. Investments in equity securities Less: Fair value adjustment Total Income statement: Other revenue (expenses): Dividend revenue (December) Interest revenue (first 11 months) Total interest and dividend revenue Gain (loss) on investments: Gain on investments (December) Gain on investments (first 11 months) Loss on investments (December) Loss on investments (first 11 months) Net loss on investments Total other revenue (expenses) ✓$ ✓ ✓ $ ✓ ✓ ✓ ✓ $ ✓ $ ($ in millions) 11.0 (1.0)✔ 10.0 0.2 5.0✔ 5.2 1.5 X (1.5) X (13.0) (13.0) Show less A
Transcribed Image Text:Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024 including any year-end adjusting entries. 2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. 3. Prepare the appropriate journal entry for each transaction or event during 2025. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5). Balance sheet: Current Assets Answer is not complete. Investments in equity securities Less: Fair value adjustment Total Income statement: Other revenue (expenses): Dividend revenue (December) Interest revenue (first 11 months) Total interest and dividend revenue Gain (loss) on investments: Gain on investments (December) Gain on investments (first 11 months) Loss on investments (December) Loss on investments (first 11 months) Net loss on investments Total other revenue (expenses) ✓$ ✓ ✓ $ ✓ ✓ ✓ ✓ $ ✓ $ ($ in millions) 11.0 (1.0)✔ 10.0 0.2 5.0✔ 5.2 1.5 X (1.5) X (13.0) (13.0) Show less A
American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2024, gains from selling trading securities totaled $8 million, losses from selling trading securities were $11 million, and the company had earned $5 million in interest revenue. The following selected transactions relate to American's investments in trading securities and equity securities during December 2024, and the first week of 2025. The company's fiscal year ends on December 31. No trading securities or equity investments were held by American on December 1, 2024. Assume that the bonds are purchased at face value. December 12, 2024 Purchased FF&G Corporation bonds for $12 million. December 13, 2024 Purchased 2 million shares of Ferry Intercommunications common stock for $22 million. American does not have significant influence over Ferry's operations or policies. Sold the FF&G Corporation bonds for $12.1 million. Purchased U.S. Treasury bills for $56 million and Treasury bonds for $65 million. Sold half the shares of Ferry Intercommunications common stock for $10 million. Sold the U.S. Treasury bills for $57.5 million. Sold the Treasury bonds for $63 million. December 15, 2024 December 22, 2024 December 23, 2024 December 26, 2024 December 27, 2024 December 28, 2024 Received cash dividends of $200,000 from the Ferry Intercommunications common stock shares. December 31, 2024 Recorded any necessary adjusting entry relating to the remaining investment. The market price of the Ferry Intercommunications stock was $10 per share. January 2, 2025 Sold the remaining Ferry Intercommunications common stock shares for $10.2 million. January 5, 2025 Purchased Warehouse Designs Corporation bonds for $34 million. Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024 including any year-end adjusting entries. 2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. 3. Prepare the appropriate journal entry for each transaction or event during 2025.
Transcribed Image Text:American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2024, gains from selling trading securities totaled $8 million, losses from selling trading securities were $11 million, and the company had earned $5 million in interest revenue. The following selected transactions relate to American's investments in trading securities and equity securities during December 2024, and the first week of 2025. The company's fiscal year ends on December 31. No trading securities or equity investments were held by American on December 1, 2024. Assume that the bonds are purchased at face value. December 12, 2024 Purchased FF&G Corporation bonds for $12 million. December 13, 2024 Purchased 2 million shares of Ferry Intercommunications common stock for $22 million. American does not have significant influence over Ferry's operations or policies. Sold the FF&G Corporation bonds for $12.1 million. Purchased U.S. Treasury bills for $56 million and Treasury bonds for $65 million. Sold half the shares of Ferry Intercommunications common stock for $10 million. Sold the U.S. Treasury bills for $57.5 million. Sold the Treasury bonds for $63 million. December 15, 2024 December 22, 2024 December 23, 2024 December 26, 2024 December 27, 2024 December 28, 2024 Received cash dividends of $200,000 from the Ferry Intercommunications common stock shares. December 31, 2024 Recorded any necessary adjusting entry relating to the remaining investment. The market price of the Ferry Intercommunications stock was $10 per share. January 2, 2025 Sold the remaining Ferry Intercommunications common stock shares for $10.2 million. January 5, 2025 Purchased Warehouse Designs Corporation bonds for $34 million. Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024 including any year-end adjusting entries. 2. Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of these investments. Ignore income taxes. 3. Prepare the appropriate journal entry for each transaction or event during 2025.
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