A company buys ten shares of securities (common stock) at $1,000 each on January 15, year 1. The securities are classified as available-for-sale. The fair value of the securities increases to $1,250 per share as of December 31, year 1. Assume no dividends are paid and that the company has a 30% tax rate on profits. What is the amount of the holding gain arising during the period after taxes that is classified in other comprehensive income for the period ending December 31, year 1?

A company buys ten shares of securities (common stock) at $1,000 each on January 15, year 1. The securities are classified as available-for-sale. The fair value of the securities increases to $1,250 per share as of December 31, year 1. Assume no dividends are paid and that the company has a 30% tax rate on profits. What is the amount of the holding gain arising during the period after taxes that is classified in other comprehensive income for the period ending December 31, year 1?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3P: On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a...

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On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
General accounting
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
On Nov 15, Quazar Co. declared a property dividend of marketable securities to be distributed on Dec 15 to stockholders of record on Dec 1. The market value of the securities was as follows: November 15 $225,000 December 1 $220,000 December 15 $250,000 The mararketable securities originally cost Quazar $200,000. What is the net effect on Quazar's retained earnings as a result of declaring this property dividend ?
On May 12, Year 1, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On December 31, Year 1, the fair value of Jedi Inc. was $124 per share. The net income of Chewco Co. was $50,000 for Year 1.Compute the comprehensive income for Chewco Co. for the year ended December 31,Year 1.
An investor purchased 100 shares of Mallard common stock at $20 per share on March 15 of Year 1. On December 31 of Year 1, the stock was quoted at $19 per share and Mallard declared and paid a dividend of $1.50 per share. On June 5 of Year 2, the investor sold all 100 shares for $22 per share. On December 31 of each year, the Fair Value Adjustment account is adjusted. Assuming the investment is measured at FV-NI, provide the journal entries to be made at each of the following dates. a. March 15, Year 1. b. December 31, Year 1. c. June 5, Year 2. d. December 31, Year 2. Note: If a journal entry isn't required for the transaction, select "N/A—Debit" and "N/A―Credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name (a) Mar. 15, Year 1 Investment in Stock Cash (b1) Dec. 31, Year 1 (b2) Dec. 31, Year 1 (c) June 5, Year 2 To record investment purchase. Cash Dividend Revenue To record dividends. Unrealized Gain or Loss-Income Fair Value Adjustment-Equity…
On January 1, Year 1, Gibson Corporation purchased bonds issued by Williamson Company. These bonds were classified as held-to-maturity securities. The face value of these bonds is $100,000, pay 8% interest and were purchased to yield 6%. The bonds mature in 10 years and pay interest on an annual basis. If Gibson Corporation paid $114,720 for these bonds, how much interest revenue should it report on the bonds at December 31, Year 1? Assume that Gibson used the effective interest method. Group of answer choices $6000 $6883 $9178 $8000
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Chowking Company engaged in the following investment transactions during the current year: February 1 Purchased 5,000 ordinary shares of ZZZ Company for P200 per share plus a brokerage commission of P50,000. These shares are classified as trading securities. June 25 Received P120 per share dividend on ZZZ Company shares. October 1 Purchased 20,000 shares of XXX Company for P150 per share plus brokerage fee of P100,000. These shares are designated at FVOCI. December 31 Received P50 per share dividend on XXX Company shares. 31 ZZZ Company shares are selling for P250 and XXX shares are selling for P180. What net amount of income should be reported for the current year?
On December 29, Adams Apples purchased 1,000 shares of General Electric common stock for $19,000 and placed the investment in an active trading account for immediate resale. On December 31, the market value of the stock is $20 per share. What is the appropriate reporting category for this investment, and at what amount will Adams Apples report it in the year-end balance sheet?