Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had theinvestments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securitiesavailable-for-sale.Unrealized HoldingGain (Loss)CostFair ValueShort term:Blair, Inc.ANC Corporation$ 484,000452,000$ 403,000484,000$(81,000)32,000Totals$ 936,000$ 887,000$(49,000)Long term:Drake Corporation$ 484,000718,000$ 562,000$ 78,000(56,000)$ 22,000Aaron Industries662,000Totals$1,202,000 $1,224,000Required:1. Prepare appropriate adjusting entries at December 31, 2021.2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry?Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Required 1Required 2What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry?Amount$(27,000)< Required 1Required 2>

Net unrealized loss = Short term loss - Long term gain = $49000 -$22000 =$27000

Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Unrealized Holding Gain (Loss) Cost Fair Value Short term: Blair, Inc. ANC Corporation $ 484,000 452,000 $ 403,000 $(81,000) 32,000 484,000 Totals $ 936,000 $ 887,000 $(49,000) Long term: Drake Corporation $ 562,000 662,000 $1,202,000 $1,224,000 $ 484,000 $ 78,000 (56,000) $ 22,000 Aaron Industries 718,000 Totals Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Amount $(27,000) < Required 1 Required 2 >

Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Unrealized Holding Gain (Loss) Cost Fair Value Short term: Blair, Inc. ANC Corporation $ 484,000 452,000 $ 403,000 $(81,000) 32,000 484,000 Totals $ 936,000 $ 887,000 $(49,000) Long term: Drake Corporation $ 562,000 662,000 $1,202,000 $1,224,000 $ 484,000 $ 78,000 (56,000) $ 22,000 Aaron Industries 718,000 Totals Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry? Amount $(27,000) < Required 1 Required 2 >

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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Indicate the statement presentation of each class of securities and any related unrealized gain (loss) accounts.
On January 1, 2024, Everglade Company purchased the following debt securities and properly accounted for them as securities available-for-sale: Security Cost Fair Value, 12/31/2024 ABC $ 58,000 $ 74,800 DEF 91,800 83,000 XYZ 34,000 39,800 All declines in value are considered temporary. What amount should the Everglade Company report relative to these securities in its 2024 statement of other comprehensive income? Multiple Choice $0. $22,600 unrealized holding gain. $13,800 net unrealized holding gain. $8,800 unrealized holding loss.
At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $35,000 $34,200 $(800) Nance Company 50,000 53,100 3,100 Totals $85,000 $87,300 $2,300 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $98,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $33,000 plus interest of $1,300. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $55,000; Oscar…
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Loreal-American Corporation purchased several marketable securities during 2018. At December 31, 2018, thecompany had the investments in bonds listed below. None was held at the last reporting date, December 31, 2017,and all are considered securities available-for-sale.Cost Fair ValueUnrealized HoldingGain (Loss)Short term:Blair, Inc. $ 480,000 $ 405,000 $(75,000)ANC Corporation 450,000 480,000 30,000Totals $ 930,000 $ 885,000 $(45,000)Long term:Drake Corporation $ 480,000 $ 560,000 $ 80,000Aaron Industries 720,000 660,000 (60,000)Totals $1,200,000 $1,220,000 $ 20,000Required:1. Prepare appropriate adjusting entries at December 31, 2018.2. What amounts would be reported in the income statement at December 31, 2018, as a result of these adjustingentries?
Loreal-American Corporation purchased several marketable securities during 2024. At December 31, 2024, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2023, and all are considered securities available-for-sale. Cost Fair Value Unrealized Holding Gain (Loss) Short term: Blair, Incorporated $ 516,000 $ 387,000 $ (129,000) ANC Corporation 468,000 516,000 48,000 Totals $ 984,000 $ 903,000 $ (81,000) Long term: Drake Corporation $ 516,000 $ 578,000 $ 62,000 Aaron Industries 702,000 678,000 (24,000) Totals $ 1,218,000 $ 1,256,000 $ 38,000 Required: Prepare appropriate adjusting entry at December 31, 2024. What amount would be reported in the income statement at December 31, 2024, as a result of the adjusting entry?
Tanner-UNF Corporation acquired as a long-term investment $200 million of 6% bonds, dated July 1, on July 1, 2021. Companymanagement has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNFdecided to elect the fair value option for accounting for its investment. The market interest rate (yield) was 8% for bonds of similar riskand maturity. Tanner-UNF paid $170 million for the bonds. The company will receive interestsemiannually on June 30 and December31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $180 million. Required:1. How would this investment be classified on Tanner-UNF's balance sheet?2. to 4. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2021, interest on December 31, 2021, atthe effective (market) and fair value changes as of December 31, 2021.5. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance…
On January 1, 2019, REP BLK Corp acquired trading securities with the following market value on December 31, 2019: Cost Market Gain (Loss) Goneril Inc preference shares 200,000.00 150,000.00 (50,000.00) Gloucester Co ordinary shares 800,000.00 950,000.00 150,000.00 Ordelia Co ordinary shares 1,000,000.00 1,100,000.00 100,000.00 Edmund Corp bonds 3,000,000.00 2,500,000.00 (500,000.00) 5,000,000.00 4,700,000.00 (300,000.00) The net decrease in market value should be recorded with a debit to a. None. This should be ignored since it is still unrealized. b.Financial asset - FVOCI c.Unrealized loss - P/L d.Unrealized loss - OCI
Record any reclassification adjustment.
Concord Corporation owns corporate bonds at December 31, 2023, accounted for using the amortized cost model. These bonds have a par value of $992,000 and an amortized cost of $ 977,000. After an impairment review was triggered, Concord determined that the discounted impaired cash flows are $914,500 using the current market rate of interest, but are $910,000 using the market rate when the bonds were first acquired. The compary follows a policy of directly reducing the carrying amount of any impaired assets. Assume that no impairment loss had been recorded earlier. (a1) Assuming Concord is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at December 31, 2023.
E4
During 2019, the first year of operation, Maly Corporation made various investments in trading securities. On December 31, 2019, the investments had the following cost and market value: Cost Market Value P 1,300,000 800,000 1,000,000 12/31/2019 P 1,250,000 900,000 700,000 XYZ MNO FGH How much should be included as unrealized loss on the income statement for the year 2019?