Available-for-Sale Securities At the beginning of 2016, Ace Company had the following portfolio of investments in available-for-sale securities (common stock): Security A B Totals Cost $20,000 30,000 $50,000 Security B C During 2016, the following transactions occurred: May 3 July 16 Dec. 31 12/31/15 Fair Value 12/31/16 Fair Value $25,000 29,000 $54,000 Purchased C securities (common stock) for $13,500. Sold all of the A securities for $25,000. Received dividends of $800 on the B and C securities, for which the following information was available: $32,000 15,500 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, 2016? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities?

Available-for-Sale Securities At the beginning of 2016, Ace Company had the following portfolio of investments in available-for-sale securities (common stock): Security A B Totals Cost $20,000 30,000 $50,000 Security B C During 2016, the following transactions occurred: May 3 July 16 Dec. 31 12/31/15 Fair Value 12/31/16 Fair Value $25,000 29,000 $54,000 Purchased C securities (common stock) for $13,500. Sold all of the A securities for $25,000. Received dividends of $800 on the B and C securities, for which the following information was available: $32,000 15,500 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, 2016? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities?

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 9E

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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
At December 31, 2020, the investments in the portfolio of the trading securities of Kennedy Company included the following.SecurityPurchaseDateOriginalPurchase PriceAtlanta Corp. bonds, 5%, $40,000Oct. 1, 2020$40,000Dallas Inc. bonds, 4%, $20,000Jul. 1, 202020,000e. Record the entry to sell the Atlanta Corp. bonds on January 2, 2021, for $45,000.Note: List multiple debits or credits (when applicable) in alphabetical order.f. Record the entry to sell the Dallas Inc. bonds on January 3, 2021, for $17,800.g. Adjust the Fair Value Adjustment account on December 31, 2021.Determine the investment related impact on net income in 2020 and 2021.
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Required information [The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Cost Company A bonds Fair Value $ 495,000 151,000 647,710 $ 530,700 159,250 661,000 Company B notes Company C bonds Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,000. July 6 Purchased Company X bonds for $123,600. November 13 Purchased Company Z notes for $267,900. December 9 Sold all of the Company A bonds for $518,300. Fair values at December 31 are B, $84,300; C, $604,800; X, $100,000; and Z, $288,000. 3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stoll report on its income statement for this year?
Required information [The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Fair Value $ 495,000 Company B notes Cost $530,500 159,080 663,000 Company C bonds 147,000 648,390 Stoll enters into the following transactions involving its available-for-sale debt securities this year. Sold one-half of the Company B notes for $78,170. Purchased Company X bonds for $127,000. January 29 July 6 November 13 Purchased Company Z notes for $267,500. December 9 Sold all of the Company A bonds for $517,400. Fair values at December 31 are B, $80,600; C, $600,800; X, $120,000; and Z, $279,000. Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports…