During 2018, Roberto sold 830 shares of Casual Investor Mutual fund for $8.875 per share. The shares were purchased on the following dates:DateMay 31, 2014September 18, 2015October 21, 2015January 12, 2017SharesPrice400$9.375225425$8.500S10.000$7.125276Calculate the gain (loss) on the sale under the following assumptions (carry your calculations to three places):a. Basis is calculated using the first-in, first-out method.b. Basis is calculated using the average cost method (assume all shares are long-term).

a. Calculate gain or loss on sale under FIFO method: Workings:

Answered: During 2018, Roberto sold 830 shares of…

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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Storytime Books, LLC purchased the following shares of ABC stock: 60 shares for $1,700 in 2017. 70 shares for $2,250 in 2018. 80 shares for $2,675 in 2019. They sold 160 shares of ABC in 2021 and did not identify which shares they sold. What basis should they use for computing gain or loss? (a) $5,108 (b) $4,971 (c) $4,953 (d) $4,942
Derr Co. purchases stock investments (with insignificant influence) at a cost of $250 on December 15. This is its first and only purchase of such securities. On December 28, Derr received a $15 cash dividend from the stock investments. At year-end December 31, the stock investments had a fair value of $200. a. Prepare the December 15 purchase entry for stock investments. b. Prepare the December 28 receipt of cash dividends entry. c. Prepare the December 31 year-end adjusting entry for the stock investments' portfolio. d. Explain how each account in entry c is reported in financial statements. e. Prepare the January 3 entry when a portion of its stock investments (that had cost $37) is sold for $40.
A paper published in the Harvard Business Review points out a new way to calculate economic profit that could be more appropriate for service firms and other people-intensive companies. Instead of focusing on investment and return on investment, the focus is on employee productivity, in terms of both generating revenues and reducing costs. The approach is to first determine economic profit in the conventional way, except that we ignore taxes, so that economic profit is before tax, as follows: Economic profit = Operating profit − Capital charge Assume the following information for a hotel chain that wishes to adopt the new method. The firm has $100 million in operating profit, has $1 billion in investment, and uses a cost of capital rate of 5%, so the capital charge is $50 million and the economic profit is $50 million. Relevant calculations are contained in Part 1 of the following schedule: Part 1: Economic Profit (in thousands, except cost of capital rate) Revenue $…
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The following information is available about Ayayai Corp.'s investments at December 31, 2023. This is the first year Ayayai has purchased securities for investment purposes. Securities 2,500 shares of Petra Corporation common shares 900 shares of Dugald Inc. preferred shares Ayayai follows IFRS. (a) Cost Account Titles and Explanation $25,000 18,000 $43,000 Fair Value $30,000 16,000 $46,000 Prepare the adjusting entry for December 31, 2023, assuming the investments are acquired for trading purposes and accounted for using the FV-NI model with no separate reporting of dividends and other types of FV-NI investment income and losses. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Debit Credit
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Kim Corporation holds 10,000 shares of its P10 par common stock as treasury stock, which was purchased in 2019 at a cost of P120,000. On December 10, 2020, Kim sold all 10,000 shares for P210,000. Assuming that Kim used the cost method of accounting for treasury stock, this sale would result in a credit to Choices; Treasury Shares Premium of P90,000. Treasury Shares Premium of P110,000. Gain on Sale of Treasury Stock of P90,000. Retained Earnings of P90,000.
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In March of 2019, Boyet Corporation purchased nontrading equity investments which are irrevocably designated at FV-OCI. On December 31, 2019, the balance in the unrealized gain/(loss) on these securities was P200,000. During 2020, stock FF was sold for P1,100,000. Pertinent data on Dec. 31, 2020 are as follows: Cost Market Value DD P2,100,000 P1,600,000 EE 1,850,000 2,000,000 FF 1,050,000 900,000 In its statement of changes in stockholder's equity for the year 2020, Boyet should report unrealized holding loss at what amount?

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