Assume the following is a portion of the investment footnote from MetLife’s 2016 10-K report. Investment earnings are a crucial component of the financial performance of insurance companies such as MetLife, and investments comprise a large part of Metlife’s assets. MetLife accounts for its bond investments as available-for-sale securities.a. $223,926 million, $8,329 million gainb. $230,050 million, $6,124 million gainc. $223,926 million, $6,124 million gaind. $230,050 million, $2,205 million loss Gross UnrealizedCost orAmortizedEstimatedDecember 31, 2016 (in millions)U.S. corporate securitiesCostGainLossFair Value$ 72,339$2,814$ 835$ 74,318Residential mortgaged-backed securities47,36535347247,246Foreign corporate securities33,5781,84243934,981U.S. treasury/agency securities25,6431,4018626,958Commercial mortgaged-backed securities17,68222320717,698Asset-backed securities11,533915111,573Foreign government securities10,0801,4013511,446State and political subdivision securities4,601185364,750Other fixed maturity securities9121741888Total bonds223,7338,3272,202229,858Redeemed preferred stocks193192Total fixed maturities$223,926$8,329$2,205$230,050At what amount does MetLife report its bond investments on its balance sheets for 2016 and what arethe net unrealized gains (losses) for 2016?a. $223,926 million, $8,329 million gainb. $230,050 million, $6,124 million gainc. $223,926 million, $6,124 million gaind. $230,050 million, $2,205 million loss

Ans. Bond investment should be reported at fair value in the balance sheet. The unrealised gains…

Answered: investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Assume the following is a portion of the investment footnote from MetLife’s 2016 10-K report. Investment earnings are a crucial component of the financial performance of insurance companies such as MetLife, and investments comprise a large part of Metlife’s assets. MetLife accounts for its bond investments as available-for-sale securities.

a. $223,926 million, $8,329 million gain
b. $230,050 million, $6,124 million gain
c. $223,926 million, $6,124 million gain
d. $230,050 million, $2,205 million loss

Gross Unrealized
Cost or
Amortized
Estimated
December 31, 2016 (in millions)
U.S. corporate securities
Cost
Gain
Loss
Fair Value
$ 72,339
$2,814
$ 835
$ 74,318
Residential mortgaged-backed securities
47,365
353
472
47,246
Foreign corporate securities
33,578
1,842
439
34,981
U.S. treasury/agency securities
25,643
1,401
86
26,958
Commercial mortgaged-backed securities
17,682
223
207
17,698
Asset-backed securities
11,533
91
51
11,573
Foreign government securities
10,080
1,401
35
11,446
State and political subdivision securities
4,601
185
36
4,750
Other fixed maturity securities
912
17
41
888
Total bonds
223,733
8,327
2,202
229,858
Redeemed preferred stocks
193
192
Total fixed maturities
$223,926
$8,329
$2,205
$230,050
At what amount does MetLife report its bond investments on its balance sheets for 2016 and what are
the net unrealized gains (losses) for 2016?
a. $223,926 million, $8,329 million gain
b. $230,050 million, $6,124 million gain
c. $223,926 million, $6,124 million gain
d. $230,050 million, $2,205 million loss

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