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
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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Entity A has 200,000 ordinary shares outstanding on January 1, 20x1. Entity A offers rights issue to its existing shareholders that enable them to acquire 1 ordinary share at a subscription price of P120 for every 5 rights held. The rights are exercised on May 1, 20x1. The market price of one ordinary share immediately before exercise is P180. Entity A reported profit after tax of P2,700,000 in 20x1. What is the basic earnings per share in 20x1? * O 12.58 O 12.67 O 11.71 O 11.67
During the year ended December 31, 2024, Rakai Corporation, a public company, had the following transactions related to investments held for trading purposes: Feb. 1 Purchased 575 IBF common shares for $25,300. Mar. 1 Purchased 1,500 Raimundo common shares for $48,000. Apr. 1 Purchased $200,000 of CRT 3% bonds at par. Interest is payable semi-annually on April 1 and October 1. July 1 Received a cash dividend of $1.50 per share on the IBF common shares. Aug. 1 Sold 250 IBF common shares at 548 per share. Oct. 1 Received the semi-annual interest on the CRT bonds. 1 Sold the CRT bonds for $205,000. Dec. 31 The fair values of the IBF and Raimundo common shares were $50 and $28 per share, respectively. Instructions Record the transactions and any required year-end adjusting entries. Show the financial statement presentation of the investments and any related accounts in the financial statements for the year ended December 31, 2024.
Edna Recording Studios, Inc., reported earnings available to common stock of $4,200,000last year. From those earnings, the company paid a dividend of $1.28 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 30% debt, 15% preferred stock, and 55% common stock. It is taxed at a rate of 21%. a. If the market price of the common stock is $46 and dividends are expected to grow at a rate of 6% per year for the foreseeable future, what is the company's cost of retained earnings financing? b. If underpricing and flotation costs on new shares of common stock amount to $7 per share, what is the company's cost of new common stock financing? c. The company can issue $2.01 dividend preferred stock for a market price of $34 per share. Flotation costs would amount to $4 per share. What is the cost of preferred stock financing? d. The company can issue $1,000-par-value, 8% annual coupon, 5-year bonds that can be sold for…