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Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $22,500. February 9 Purchased Sony notes for $57,240. June 12 Purchased Mattel bonds for $42,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $24,900; Sony, $48,550; and Mattel, $52, 650. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $25,500. July 5 Sold all of the Mattel bonds for $37,250. July 22 Purchased Sara Lee notes for $13, 100. August 19 Purchased Kodak bonds for $16,700. December 31 Fair values for debt in the portfolio are Kodak, $18, 025; Sara Lee, $14,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $59,200. June 30 Purchased Black & Decker bonds for $52,400. August 3 Sold all of the Sara Lee notes for $11,550. November 1 Sold all of the Kodak bonds for $21,775. December 31 Fair values for debt in the portfolio are Black & Decker, $55,800; and Microsoft, $159,000.

Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $22,500. February 9 Purchased Sony notes for $57,240. June 12 Purchased Mattel bonds for $42,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $24,900; Sony, $48,550; and Mattel, $52, 650. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $25,500. July 5 Sold all of the Mattel bonds for $37,250. July 22 Purchased Sara Lee notes for $13, 100. August 19 Purchased Kodak bonds for $16,700. December 31 Fair values for debt in the portfolio are Kodak, $18, 025; Sara Lee, $14,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $59,200. June 30 Purchased Black & Decker bonds for $52,400. August 3 Sold all of the Sara Lee notes for $11,550. November 1 Sold all of the Kodak bonds for $21,775. December 31 Fair values for debt in the portfolio are Black & Decker, $55,800; and Microsoft, $159,000.

FINANCIAL ACCOUNTING
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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2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. Note: Loss amounts should be indicated with a minus sign. Debt Investments Long-Term Available-for-sale Securities (cost) Fair value adjustment-Available-for-sale Long-Term Available-for-sale Securities (Fair value) Show Transcribed Text Realized gains (losses) Sale of Johnson & Johnson Sale of Mattel 12/31/Year 1 Sale of Sony Sale of Sara Lee Sale of Kodak Total realized gains (losses) Unrealized gains (losses) at year-end $ $ 0 Year 1 $ 3 12/31/Year 2 3. Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale debt securities at each year-end. Note: Losses should be indicated by a minus sign. 0 $ 0 Year 2 12/31/Year 3 0 $ $ Year 3 0 0
Transcribed Image Text:2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. Note: Loss amounts should be indicated with a minus sign. Debt Investments Long-Term Available-for-sale Securities (cost) Fair value adjustment-Available-for-sale Long-Term Available-for-sale Securities (Fair value) Show Transcribed Text Realized gains (losses) Sale of Johnson & Johnson Sale of Mattel 12/31/Year 1 Sale of Sony Sale of Sara Lee Sale of Kodak Total realized gains (losses) Unrealized gains (losses) at year-end $ $ 0 Year 1 $ 3 12/31/Year 2 3. Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale debt securities at each year-end. Note: Losses should be indicated by a minus sign. 0 $ 0 Year 2 12/31/Year 3 0 $ $ Year 3 0 0
Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $22,500. February 9 Purchased Sony notes for $57,240. June 12 Purchased Mattel bonds for $42,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $24,900; Sony, $48,550; and Mattel, $52, 650. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $25,500. July 5 Sold all of the Mattel bonds for $37,250. July 22 Purchased Sara Lee notes for $13, 100. August 19 Purchased Kodak bonds for $16,700. December 31 Fair values for debt in the portfolio are Kodak, $18,025; Sara Lee, $14,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $59,200. June 30 Purchased Black & Decker bonds for $52,400. August 3 Sold all of the Sara Lee notes for $11,550. November 1 Sold all of the Kodak bonds for $21,775. December 31 Fair values for debt in the portfolio are Black & Decker, $55,800; and Microsoft, $159,000.
Transcribed Image Text:Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $22,500. February 9 Purchased Sony notes for $57,240. June 12 Purchased Mattel bonds for $42,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $24,900; Sony, $48,550; and Mattel, $52, 650. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $25,500. July 5 Sold all of the Mattel bonds for $37,250. July 22 Purchased Sara Lee notes for $13, 100. August 19 Purchased Kodak bonds for $16,700. December 31 Fair values for debt in the portfolio are Kodak, $18,025; Sara Lee, $14,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $59,200. June 30 Purchased Black & Decker bonds for $52,400. August 3 Sold all of the Sara Lee notes for $11,550. November 1 Sold all of the Kodak bonds for $21,775. December 31 Fair values for debt in the portfolio are Black & Decker, $55,800; and Microsoft, $159,000.
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