Carlin Enterprises purchased 2,000 shares of the 2,000,000 common shares outstanding in Ca For the foreseeable future. How should this investment be classified on the books of Carlin? O trading equity investment Oheld-to-maturity debt investment Oheld-to-maturity equity investment available-for-sale equity investment uestion 23

Carlin Enterprises purchased 2,000 shares of the 2,000,000 common shares outstanding in Ca For the foreseeable future. How should this investment be classified on the books of Carlin? O trading equity investment Oheld-to-maturity debt investment Oheld-to-maturity equity investment available-for-sale equity investment uestion 23

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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Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 8,900 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $8 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $6 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1. Year 1 Sept. 12 Year 1 Dec. 31 b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements? Unrealized Gain (Loss) on Available-for-Sale Investments is reported in the of the
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Stock acquisition (fair value is different from book value) The following financial statement information is for an investor company and an investee company on January 1, 2022. On January 1, 2022, the investor company's common stock had a traded market value of $28 per share, and the investee company's common stock had a traded market value of $21 per share. Book Values Fair Values Investor Investee Investor Investee Receivables & inventories $192,000 $96,000 $180,000 $86,400 384,000 192,000 420,000 240,000 432,000 192,000 480,000 249,600 160,000 153,600 $1,008,000 $480,000 $1,240,000 $729,600 $288,000 $153,600 $320,000 $164,000 40,000 32,000 536,000 275,200 144,000 19,200 $1,008,000 $480,000 $720,000 $326,400 $920,000 $565,600 Land Property & equipment Trademarks & patents Total assets Liabilities Common stock ($1 par) Additional paid-in capital Retained earnings Total liabilities & equity Net assets Assume that the investor company issued 30,000 new shares of the investor company's…
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Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 860 $43,602 Pavlov Co. 2,330 61,512 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $60 per share and the Pavlov Co. stock had a market value of $48 per share. Galileo Company had net income of $337,400 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: $fill in the blank 6f30cb02405dfbc_2 Plus Unrealized Gain (Loss) on Available-for-Sale Investments fill in the blank 6f30cb02405dfbc_4 $fill…
Carlin Enterprises purchased 2,000 shares of the 2,000,000 common shares outstanding in Captain Inc. Carlin intends to hold on to this investme for the foreseeable future. How should this investment be classified on the books of Carlin? O trading equity investment O held-to-maturity debt investment O held-to-maturity equity investment O available-for-sale equity investment Question 23 Held-to-maturity securities O affects other comprehensive income and appear as financing activities on the statement of cash flows. are never disclosed in the notes to financial statements
Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…
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