On December 30, Year 3, Varsity Corporation sold its investment in marketable equity securities costing $800,000 for $860,000 cash. The securities werepurchased on January 2, Year 1, and the market value of the securities was $820,000 and $780,000 on December 31, Year 1 and Year 2, respectively. How muchgain or loss will Varsity report in its income statement for the year ending December 31, Year 3?Multiple ChoiceA $40,000 gain.An $80,000 gain.A $20,000 loss.A $60,000 gain..

Marketable Securities -Financial products that are easily bought or sold on the market are known as…

Answered: 3, vars orporation sold its investment…

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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15. The income statement of Osborne Company reported net income of $500,000 for the year ended December 31 before considering the following: a. During the year, Osborne purchased trading securities b. At year end, the fair value of the investment portfolio was $35,000 less than the cost 4 c. The balance of Retained Earnings was $743,000 on January 1; d. Osborne paid $46,000 cash dividends during the year. Using the above data, calculate the balance of Retained Earnings on December 31.
None
On July 1, Year 1, XYZ Corporation purchased as a long-term investment a $2 million face amountABC Co. 6% bond for $2,025,000 plus accrued interest to yield 5.75%. On December 31, Year 1,the bonds had a fair value of $1,850,000. What amount of income should XYZ report on its incomestatement for the year ended December 31, Year 1, related to this bond investment if it is classifiedas a held-to-maturity security?a. $120,000b. $116,438c. $121,500d. $115,000
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Subject: acounting
Novi purchased ABC bonds on 1/1/22. Data regarding these available-for-sale securities follow: Cost MV December 31, 2022 $150,000 $130,000 December 31, 2023 150,000 161,000 December 31, 2024 150,000 155,000 On 1/1/25, Novi sold $40,000 (cost) of the securities for $40,100. Market Value of the remaining securities at 12/31/25 was $108,000. The balance of the Fair Value Adjustment account included on the 12/31/25 balance sheet is: a.$2,000 debit b.$2,000 credit c.$2,100 debit d.$1,900 credit e.$1,900 debit
Under the accumulated other comprehensive income in stockholders’ equity section of its December 31, year 2 balance sheet, what amount should Stone report? *
Brief Exercises Journalize entries for debt investments. BEH.1 (LO 1), AP Craig Corporation purchased debt investments for $40,800 on January 1, 2022. On July 1, 2022, Craig received cash interest of $1,660. Journalize the purchase and the receipt of interest. Assume no interest has been accrued. Journalize entries for stock investments. GRANT Docombor 1 the
Brave Industries owned investment securities with a book value of $20 million on August 12. At that time, Brave's board of directors declared a property dividend consisting of these securities. The fair value of the securities was as follows: Declaration --- August 12 Date of record --- September 1 Distribution date --- September 20 By how much is total stockholder' equity reduced by the property dividend? $31 million $30 million $27 million $20 million $28 million 30 million 31 million
Q2. The following transactions involving marketable securities investments of Kappa Co., occurred during 2022; a) On Feb. 14, purchased Alfa's 90-day bonds, paying cash of $170,000 (par value $170,000), issue date Feb. 14, that pay 9% interest. b) On March 21, purchased 850 shares of Beta Co. at $21 per share, in cash. c) On May 14, collected the principal and 90-days' interest on the bonds purchased in transaction a. d) On Aug. 1, paid $70,000 cash to Gama Co.'s 12% bonds (par value $70,000), issue date July 31, 2022, and retires January 31, 2023. e) On Sept. 1, Beta Co. declared a $1.80 per share cash dividend on shares payable on Oct.31. f) On Oct. 7, sold 425 shares of Beta Co. and collected totally $10,625. g) On Oct. 31, collected Gama Co.'s 90-days' interest and Beta Co.'s dividends. Required: Prepare the journal entries and post to necessary ledger accounts.

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