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 theseinvestments. 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 3Indicate any amounts that American would report in its 2024 balance sheet and income statement as a result of theseinvestments. Ignore income taxes.Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimalplace, (i.e., 5,500,000 should be entered as 5.5).Balance sheet:Current AssetsAnswer is not complete.Investments in equity securitiesLess: Fair value adjustmentTotalIncome statement:Other revenue (expenses):Dividend revenue (December)Interest revenue (first 11 months)Total interest and dividend revenueGain (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 investmentsTotal other revenue (expenses)✓$✓✓ $✓✓✓✓$✓$($ inmillions)11.0(1.0)✔10.00.25.0✔5.21.5 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 11months of 2024, gains from selling trading securities totaled $8 million, losses from selling trading securities were $11 million, and thecompany had earned $5 million in interest revenue. The following selected transactions relate to American's investments in tradingsecurities 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 atface value.December 12, 2024 Purchased FF&G Corporation bonds for $12 million.December 13, 2024Purchased 2 million shares of Ferry Intercommunications common stock for $22 million. American doesnot 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, 2024December 22, 2024December 23, 2024December 26, 2024December 27, 2024December 28, 2024Received 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 theFerry 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 theseinvestments. Ignore income taxes.3. Prepare the appropriate journal entry for each transaction or event during 2025.

Answer to 2: The extract of Balance Sheet and Income Statements are attached below.

Answered: 2. Indicate any amounts that American…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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