Problem 15-9 (AICPA Adapted) During 2021, Garr Company purchased marketable equity securities as a trading investment. For the year ended December 31, 2021, the entity recognized an unrealized loss of P200,000. There were no security transactions during 2022. The entity provided the following information on December 31, 2022: Market value Security A B Cost 2,450,000 1,800,000 4,250,000 2,300,000 (10000) 900.000 2,700,000 5,000,000 In the 2022 income statement, what amount should be reported as unrealized gain or loss? a. Unrealized gain of P950,000 b. Unrealized loss of P950,000 c. Unrealized loss of P750,000 Unrealized gain of P750,000 d.
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A: The available-for-sale securities are a kind of security that is held with the intent of selling.…
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Q: unrealized gain or loss?
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A: The question is based on the concept of Financial Accounting.
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- Problem 19: 56. On its December 31, 2020 balance sheet, Polo Company reported securities measured at fair value through other comprehensive income. These securities were acquired at a cost P360,000 and had a year-end fair value of P330,000. On December 31, 2021, the fair value of the securities was P350,000. What should Polo report as 2021 income or loss in the profit or loss statement as a result of the change in market value? Problem 20: Fastfoods Company acquired the following investments classified as trading securities on August 20, 2020: Jolibee shares KFC shares 400,000 250,000 300,000 P McDonald shares On December 31, 2020, the close of the year, these investments had the following market values: Jolibee shares KFC shares 450,000 220,000 310,000 McDonald shares 57. On February 23, 2021, Fastfoods company sold the KFC shares for P230,000. How much would berecognized as gain/ (loss) on sale of securities on the sale of the KFC shares as a component of other comprehensive income?Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Cost Fair Value Unrealized HoldingGain (Loss) Short term: Blair, Inc. $ 480,000 $ 405,000 $ (75,000 ) ANC Corporation 450,000 480,000 30,000 Totals $ 930,000 $ 885,000 $ (45,000 ) Long term: Drake Corporation $ 480,000 $ 560,000 $ 80,000 Aaron Industries 720,000 660,000 (60,000 ) Totals $ 1,200,000 $ 1,220,000 $ 20,000 Required:1. Prepare appropriate adjusting entry at December 31, 2021.2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry?At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/19 Fair Value A $45,000 $56,000 B 68,000 65,000 Totals $113,000 $121,000 During 2019, the following transactions occurred: Transactions: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $56,000 plus interest of $1,000. Dec. 31 Received interest of $1,000 on the B and C securities. Additionally the following information was available: Security 12/31/19 Fair Value B $75,000 C 53,000 Required: 1. Prepare journal entries to record the preceding information. 2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2019? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale…
- E16.11 (LO 3), AP On December 31, 2022, available-for-sale debt securities for Storrer, Inc. are as follows. The securities are considered to be long-term investments. Security A B C Cost $17,500 12,500 23,000 $53,000 Fair Value $16,000 14,000 21,000 $51,000 Instructions Prepare the adjusting entry on December 31, 2022, to report the securities at fair value. Show the statement presentation on December 31, 2022, after adjustment to fair value. E. Kretsinger, a member of the board of directors, does not understand the reporting of the unrealized gains or losses. Write a letter to Ms. Kretsinger explaining the reporting and the purposes that it serves. Prepare to adjust entries for fair value, and indicate statement presentation for two classes of securities.EH.7 (LO 3), AP Writing At December 31, 2022, available-for-sale debt securities for Gwynn, Inc. are as follows. The securities are considered to be a long-term investment. Instructions Security A B C Total Cost $18,100 12,500 23,000 $53,600 Fair Value $16,000 14,800 18,000 $48,800 a. Prepare the adjusting entry at December 31, 2022, to report the securities at fair value. b. Show the statement presentation at December 31, 2022, after adjustment to fair value. c. Pam Jenks, a member of the board of directors, does not understand the reporting of the unrealized gains or losses on trading debt securities and available-for-sale debt securities. Write a letter to Ms. Jenks explaining the reporting and the purposes it serves.Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Unrealized Holding Gain (Loss) Cost Fair Value Short term: Blair, Inc. ANC Corporation $ 484,000 452,000 $ 403,000 484,000 $(81,000) 32,000 Totals $ 936,000 $ 887,000 $(49,000) Long term: Drake Corporation $ 484,000 718,000 $ 562,000 $ 78,000 (56,000) $ 22,000 Aaron Industries 662,000 Totals $1,202,000 $1,224,000 Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount would be reported in the income statement at December 31, 2021, as a result of…
- • The following information is available for Alpha's investments: Fair Value Market Original Adjustment Value Investment Cost 12/31/2020 Classification 12/31/2021 Available for Beta bonds $80,000 $6,000 dr. $78,000 Sale Gamma bonds $60,000 $4,000 cr. Trading $66,000 The journal entries on 12/31/21 for Beta will include: O Debit to Unrealized Loss - OCI for $8,000 O Debit to Unrealized Loss - NI for $2,000 O Debit to Unrealized Loss - NI for $6,000 O Debit to Unrealized Loss - NI for $8,000At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $30,000 $29,200 $(800) Nance Company 50,000 53,200 3,200 Totals $80,000 $82,400 $2,400 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $97,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $28,000 plus interest of $1,200. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $54,000;…Investment in Trading and AFS Securities A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities and $60,000 as AFS securities. It sells the securities in 2023. Required For each of the following scenarios, indicate the net effect on income and other comprehensive income in each year 2022 and 2023. In each case, any unrealized decline in value below cost is expected to be recovered and is attributed to market factors. a. Fair value, end of 2022 Selling price, 2023 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. Income OCI 5,000 ✓ (1,000) * End of 2022 $ 2023 b. Trading securities AFS securities $38,000 $65,000 43,000 64,000 Fair value, end of 2022 Selling price, 2023 (2,000)✓ $ 5,000 x End of 2022 $ 2023 Trading securities AFS securities $45,000 $56,000 42,000 68,000 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI (4,000)✓ 0…
- Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2023, and all are considered securities available-for-sale. Short term: Blair, Incorporated ANC Corporation Totals Long term: Drake Corporation Aaron Industries Totals Required 1 Required 2 Cost $ 516,000 468,000 $984,000 View transaction list Fair Value 1 " $ 387,000 516,000 $ 903,000 $ 516,000 702,000 $ 578,000 678,000 $ 1,218,000 $ 1,256,000 Journal entry worksheet Required: 1. Prepare appropriate adjusting entry at December 31, 2024. 2. What amount would be reported in the income statement at December 31, 2024, as a result of the adjusting entry? Complete this question by entering your answers in the tabs below. Unrealized Holding Gain (Loss) $ (129,000) 48,000 $ (81,000) Prepare appropriate adjusting entry at December 31, 2024. Note: If no entry is required for a…The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, intending to profit from short-term differences in price and maintaining them in an active trading portfolio. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 8% Distribution Transformers Corporation bonds costing $560,000 at face value. Sep. 1 Acquired $1,380,000 of American Instruments' 10% bonds at face value. Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 Sold the Distribution Transformers bonds for $610,000. Nov. 1 Purchased $2,200,000 of M&D Corporation 6% bonds at face value. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are American Instruments bonds $ 1,336,000 M&D…At December 31, 2021, Hull-Meyers Corp. had the following investments that were purchased during 2021, its first year of operations: Amortized cost Fair Value Trading Securities: Security A $ 980,000 $ 993,000 Security B 185,000 180,200 Totals $ 1,165,000 $ 1,173,200 Securities Available-for-Sale: Security C $ 780,000 $ 852,000 Security D 980,000 998,200 Totals $ 1,760,000 $ 1,850,200 Securities to Be Held-to-Maturity: Security E $ 570,000 $ 581,600 Security F 695,000 689,400 Totals $ 1,265,000 $ 1,271,000 No investments were sold during 2021. All securities except Security D and Security F are considered short-term investments. None of the fair value changes is considered permanent. Required:Complete the following table. (Amounts to be deducted should be indicated with a minus sign.)