Assume that the reorganized "new capital structure must be 60% debt and 40% common equity, with $4,000,000 of the new debt subordinated to senior debt. After the fair distribution of the new securities under the reorganization O The old Seror Debt of 56.000.000 in the last pre bankruptcy balance sheet will after reorganization, receved (among others new Subordinated Oebit of $4.000.000 OA The old Senior Debt of 56.000.000 in the last pre-bankruptey balance sheet will after reorganiation, received (among others) new Senior Debe of S4.000.000 OC The r Subordinated Debt of 50.000.000 in the last pre tankruptey balance sheet wil, after reorganiation, receive (among others) new Subordinated Debit of $4.000.000 Od The old Subordnated Debt of 59.000,000 in the last pre bankruptey balance sheet will, afer reorganaon, recelve no new Common Stockholders tquity

Assume that the reorganized "new capital structure must be 60% debt and 40% common equity, with $4,000,000 of the new debt subordinated to senior debt. After the fair distribution of the new securities under the reorganization O The old Seror Debt of 56.000.000 in the last pre bankruptcy balance sheet will after reorganization, receved (among others new Subordinated Oebit of $4.000.000 OA The old Senior Debt of 56.000.000 in the last pre-bankruptey balance sheet will after reorganiation, received (among others) new Senior Debe of S4.000.000 OC The r Subordinated Debt of 50.000.000 in the last pre tankruptey balance sheet wil, after reorganiation, receive (among others) new Subordinated Debit of $4.000.000 Od The old Subordnated Debt of 59.000,000 in the last pre bankruptey balance sheet will, afer reorganaon, recelve no new Common Stockholders tquity

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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At December 31, 2017, the available-for-sale debt portfolio for Steffi Graf, Inc. is as follows. Security Cost Fair Value Unrealized Gain (Loss) A $17,500 $15,000 $(2,500) B 12,500 14,000 1,500 C 23,000 25,500 2,500 Total $53,000 $54,500 1,500 Previous fair value adjustment balance-Dr 400 Fair value adjustment-Dr $1,100 On January 20, 2018, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees. A. Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value. B. Show the balance sheet presentation of the investment-related accounts at December 31, 2017.
The Q3 Company purchases P2,000,000 of bonds. The asset has been designated as one at fair value through profit and loss. One year later, 10% of the bonds are sold for P400,000. Total cumulative gains previously recognized in Q3's financial statements in respect of the asset are P100,000. What is the amount of the gain on disposal to be recognized in profit or loss?
1. Computational. On January 1, 20x1, ABC purchased bonds with face amount of P5,000,000. The entity paid P4,700,000 plus transaction cost of P42,130 for the bond investment. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds the open market. The bonds mature on December 31, 20x3 and pays 6% interest annually on December 31 each year with 8% effective interest rate (after incorporating the transaction cost on initial recognition). The bonds are quoted at 106 and 108 on December 31, 20x1 and December 31, 20x2. The bonds are sold at 103 on July 1, 20x3, excluding accrued interest. Use 4-decimal present value factor. For the year ended December 31, 20x3, how much is the total impact to profit or loss as a result of the business model of ABC in holding this investment? (sample answer: 2,350,450.55)
A Corporation provided the following information for the current year: Income from continuing operation 2,000,000Loss on credit risk of financial liability at FVPL 200,000Revaluation surplus 1,500,000Loss from discontinued operation 300,000Unrealized gain on financial asset – FVPL 900,000Net “remeasurement” gain on defined benefit plan during the year 400,000 Unrealized gain on equity investment – FVOCI 1,000,000Investment gain on debt investment – FVOCI 900,000Unrealized loss on future contract designated as a cashflow hedge 200,000Translation gain on foreign operation 300,000 [Q7]: Determine the total amount of (21) other comprehensive income and (22) comprehensive income for the current year.
PROBLEM: The creditors of the RR Corp. agreed to a liquidation based on the statement of affairs, suggested that unsecured creditors, without priority would receive approximately P.60 on the peso. The unsecured creditors are interested in determining whether the preliminary estimate still seems appropriate. The trustee was originally assigned noncash asset for P1,480,000 and creditor claims as follows: Fully secured P670,000 Partially secured P400,000 Unsecured with priority P200,000 Unsecured without priority P320,000 Assets with book value of P45,000 and unsecured liabilities, without priority, of P35,000 were subsequently discovered. Assets with a total book value of P740,000 were sold for P715,000 net. Fully secured liabilities of P410,000 and partially secured liabilities of P280,000 were paid. Remaining liquidation expenses were estimated to be P30,000. Assume the remaining noncash assets have an estimated net realizable value as follows: Assets traceable to…
TB MC Qu. 15-99 (Algo) Carpark Services... Carpark Services began operations in 20X1 and maintains investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of debt securities follows. Available-for-Sale Securities December 31, 20X1 December 31, 20X2 Cost $ 340,000 $ 412,000 Multiple Choice Fair Value $ 344,600 $ 429, 200 The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X2 is: Debit Unrealized Gain - Equity $17,200; Credit Fair Value Adjustment - Available-for-Sale $17,200. Debit Fair Value Adjustment - Available-for-Sale $12,600; Credit Unrealized Loss - Equity $4,600; Credit Unrealized Gain - Equity, $8,000. Debit Fair Value Adjustment - Available-for-Sale $17,200; Credit Unrealized Gain - Equity, $17,200. Debit Fair Value Adjustment - Available-for-Sale $17,200; Credit Unrealized Loss - Equity $17,200. Debit Fair Value Adjustment - Available-for-Sale $12,600; Credit Unrealized Gain Equity $12,600.
In business combination, the fair value of combinee bonds payable was $ 120,000 and the carrying amount of bonds payable was $ 100,000. The journal entry to allocate liquidated company to identifiable assets and liabilities with remainder to goodwill includes: а. Credit to premium on bonds payable $ 20,000. b. Debit to discount on bonds payable $ 20,000. C. Credit to bonds payable $ 120,000. d. Debit to premium on bonds payable $ 20,000
• 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 $8,000
On 1/1/2019, Allie Company issued bonds payable of $500,000 at 8%. It was sold at $464,000 with effective interest rate of 9%. On 1/1/2020, Choco purchased all of Allie's bond for $532,000 cash with effective interest at 7% and Allie's bonds payable has been effectively retired. 3) Compute the consolidated gain or loss on a consolidated income statement for at the end of 2020
Tanner-UNF Corporation acquired as a long-term investment $200 million of 6% bonds, dated July 1, 2024. Assume Tanner-UNF management is holding the bonds in a trading portfolio. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. to 3. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024, interest on December 31, 2024, at the effective (market) rate and the fair value adjustment at December 31. 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to sell the investment on January 2, 2025, for $190 million. Prepare the journal entry to record the sale. Comple this question by entering your wers in the tabs below. Req 1 to 3 Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to…
es Tanner-UNF Corporation acquired as a long-term Investment $170 million of 6% bonds, dated July 1, on July 1, 2024. Company management has the positive Intent and ability to hold the bonds until maturity, but when the bonds were acquired, Tanner-UNF decided to elect the fair value option for accounting for Its Investment. The market Interest rate (yleld) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $140 million for the bonds. The company will receive Interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $150 million. Required: 1. How would this Investment be classified on Tanner-UNF's balance sheet? 2. to 4. Prepare the journal entry to record Tanner-UNF's Investment in the bonds on July 1, 2024, Interest on December 31, 2024, at the effective (market) rate, and fair value changes as of December 31, 2024. 5. At what amount will Tanner-UNF report Its Investment in the…
odwill to be amortized periodically for 20 years. G. Goodwill to be amortized for 40 years D. Expenses immediately. B. Goodwill not subject to amortization but subject to impairment. 3. Two methods of arranging business combinations: C. Acquisition and uniting of interest D. Merger and acquisition of stocks A/ Merger and consolidation B. Consolidation and Acquisition of stocks . The cost of registering equity securities in a business combination should be recorded as: A. An income of the period B. An expense of the period C. Deduction from additional paid-in capital D. Part of the cost of the stock acquired 5. In acquisition-type combination, the appropriate accounting for the excess of fair values of net assets acquired er the price paid is to: A. Recognize as income in the books of the acquirer B. Recognize as additional paid-in capital in the books of the acquirer blbe C. Reduce proportionately current fair values assigned to the acquiree's non-current assets any remaining excess as…