DJ Chase carries portfolios of both trading securities and available-for-sale securities. At the end of 2018 and 2017, the trading securities were valued at $468.4 billion and $595.6 billion, respectively; and the available-for- sale securities were valued at $205.9 billion and $85.4 billion, respectively. Together, the investments comprise about 25 percent of the company's total assets as of December 31, 2018. Unrealized gains reported on the 2018 income statement totaled $9.9 billion. Trading securities are carried on the balance sheet at market value. Compute the net decrease in the investment in trading securities during 2018.

DJ Chase carries portfolios of both trading securities and available-for-sale securities. At the end of 2018 and 2017, the trading securities were valued at $468.4 billion and $595.6 billion, respectively; and the available-for- sale securities were valued at $205.9 billion and $85.4 billion, respectively. Together, the investments comprise about 25 percent of the company's total assets as of December 31, 2018. Unrealized gains reported on the 2018 income statement totaled $9.9 billion. Trading securities are carried on the balance sheet at market value. Compute the net decrease in the investment in trading securities during 2018.

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 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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Additional information:1. Held-to-maturity securities (long-term investment) carried at a cost of $43,000 on December 31, 2021, were sold in 2022 for $34,000. 2. Equipment that cost $50,000 and 80% depreciated was sold in 2022 for $8,000.3. Net income was $46,000 and $50,000 for 2022 and 2021, respectively.4. Dividends paid amounted to $10,000.5. A building was purchased at $500,000 on December 31, 2022 by issuing common stock at par 6. Transactions other than the purchase of a building were made in cash.Prepare a statement of cash flows for the year 2022. Use the indirect method for the operating activities.*Be sure to prepare the investing and financing activities as well.
On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $15,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $13,000. The December 31, 2018, balance sheet showed the following: Marsh Company Partial Balance Sheet December 31, 2018 1 Assets 2 Investment in Available-for-Sale Securities $15,000.00 3 Less: Allowance for Change in Fair Value of Investment (2,000.00) 4 $13,000.00 5 Shareholders’ Equity: 6 Unrealized Holding Gain/Loss $(2,000.00) On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $17,000 for $17,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 19,000…
At December 31, 2018, Atlanta Company has an equity portfolio valued at $160,000. Its cost was $132,000. If the Securities Fair Value Adjustment has a debit balance of $8,000, prepare the journal entry required at December 31, 2018.
At December 31, 2018, Charlotte Company has an equity portfolio valued at $160,000. Its cost was $132,000. If the Securities Fair Value Adjustment has a debit balance of $8,000, which of the following journal entries is required at December 31, 2018?
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
Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
On January 1, 2021, Jason Corp. purchased 5-year bonds with a face value of P10,000,000 and a stated interest rate of 12% per year collectible every December 31. The bonds were acquired to yield 11%. These bonds were classified based on business model of collecting contractual cash flows and to sell. On December 31, 2021 and December 31, 2022, the bonds were quoted at 104 and 102, respectively. At what amount should the investment be reported in its December 31, 2022 statement of financial position? Group of answer choices P10,200,000 P10,400,000 P10,000,000 P10,150,000
On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2015, and mature January 1, 2020, with interest receivable on December 31 of each year. Roosevelt's business model is to hold these bonds to collect contractual cash flows. Instructions: 1. Prepare the journal entry at the date of the bond purchase. 2. Prepare a bond amortization schedule. 3. Prepare the journal entry to record the interest received and the amortization for 2015. 4. Prepare the journal entry to record the interest received and the amortization for 2016.
Red Company had the following portfolio of equity securities to other comprehensive income at December 31, 2018:Security Cost Market ValueA 400,000 390,000B 700,000 660,000Total 1,100,000 1,050,000If Red Company would have to sell the securities transaction cost will be incurred as follows; P20,000 and P30,000 for security A and B, respectively. In Red's December 31, 2018 statement of financial position, how much should be reported as the carrying value of the portfolio? a. 1,050,000 b. 1,060,000 c. 1,100,000 d. 1,110,000
On August 1, 2018, Dambro Company acquired 1,200, $1,000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2024, with interest paid each October 31 and April 30. The bonds will be added to Dambro’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2018 is a. Debt Investments 1,191,000 Cash 1,191,000 b. Debt Investments 1,164,000 Interest Receivable 27,000 Cash 1,191,000 c. Debt Investments 1,164,000 Interest Revenue 27,000 Cash 1,191,000 d. Debt Investments 1,200,000 Interest Revenue 27,000 Discount on Debt Investments…
Flounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…
On January 1, 2018, CHE Co. purchased 12% bonds, having a maturity value of P800,000, for P860,652 including transaction cost of P110,000. The bonds provide the bondholders with a 10% yield, are dated January 1, 2018, and mature January 1, 2023, with interest receivable December 31 of each year. CHE’s business model is to hold these bonds to collect contractual cash flows solely for payment of principal and interest and therefore designate such debt investment at amortized cost. On December 31, 2020 after paying the accrued interest, the issuer of bonds completed a negotiation with its creditors to reduce the interest from 12% to 8% for the remaining term of the bond due to continuous decline in the market rate of interest. The present value of 1 at 10% for 2 periods is 0.8264 while the present value of annuity of 1 at 10% for 2 periods is 1.7355. How much is the carrying value/amortized cost of the debt investment at December 31, 2018?