On January 1, 2020, Acker Inc. had the following balance sheet. Acker Inc. Balance Sheet As of January 1, 2020 Assets Equity Cash $ 50,000 Common stock $260,000 Debt investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000 Total $290,000 Total $290,000 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.'s available-for-sale debt securities at December 31, 2020, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.'s income statement for 2020 was as follows. (Ignore income taxes.) Acker Inc. Income Statement For the Year Ended December 31, 2020 Dividend revenue $ 5,000 Gain on sale of investments 30,000 Net income $35,000 Instructions (Assume all transactions during the year were for cash.) d. Prepare a balance sheet as of December 31, 2020
On January 1, 2020, Acker Inc. had the following balance sheet. Acker Inc. Balance Sheet As of January 1, 2020 Assets Equity Cash $ 50,000 Common stock $260,000 Debt investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000 Total $290,000 Total $290,000 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.'s available-for-sale debt securities at December 31, 2020, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.'s income statement for 2020 was as follows. (Ignore income taxes.) Acker Inc. Income Statement For the Year Ended December 31, 2020 Dividend revenue $ 5,000 Gain on sale of investments 30,000 Net income $35,000 Instructions (Assume all transactions during the year were for cash.) d. Prepare a balance sheet as of December 31, 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Acker Inc. had the following balance sheet.
| Acker Inc. Balance Sheet As of January 1, 2020 |
||||
| Assets | Equity | |||
| Cash | $ 50,000 | Common stock | $260,000 | |
| Debt investments (available-for-sale) | 240,000 | Accumulated other comprehensive income | 30,000 | |
| Total | $290,000 | Total | $290,000 |
The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.'s available-for-sale debt securities at December 31, 2020, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.'s income statement for 2020 was as follows. (Ignore income taxes.)
| Acker Inc. Income Statement For the Year Ended December 31, 2020 |
||||
| Dividend revenue | $ 5,000 | |||
| Gain on sale of investments | 30,000 | |||
| Net income | $35,000 |
Instructions
(Assume all transactions during the year were for cash.)
d. Prepare a balance sheet as of December 31, 2020
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