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P16.5A (LO 3, 5) AP During 2020, Financial Holdings, a public company, purchased equity securities for trading purposes. At December 31, 2020, the securities for Financial Holdings were as follows: Record equity investments; show statement presentation. Security Quantity Cost Market Value Sabo common shares 1,000 $15,000 $13,500 PYK $1.50 preferred shares 2,000 24,000 24,500 Total $39,000 $38,000 The following transactions with respect to Financial Holdings' investments occurred during 2021: 15 Purchased 1,500 common shares of Hazmi for $15.00 per share. The shares are designated as fair value through other comprehensive income. Received dividends on the PYK preferred shares of $1.50 per share. Sold 750 of the Sabo common shares for $15.75 per share. 5 Received dividends on the Sabo common shares of $2.50 per share. Jan. Mar. 20 June 15 Aug. Oct. 15 Received an additional 1,500 common shares of Hazmi as a result of a 2-for-1 stock split. At December 31, 2021, the securities held by Financial Holdings were trading on the TSX at the following prices: Security Price Sabo common shares $16.00 PYK $1.50 preferred shares 13.75 Hazmi common shares 7.00 Instructions a. Show how the securities would be reported on Financial Holdings' December 31, 2020, balance sheet. b. Record Financial Holdings' 2021 transactions and any required adjusting journal entries at December 31, 2021. c. Show how the investment income, gains, and losses would be reported on the statement of comprehensive income for the vear ended December 31, 2021. (Ignore income tax.

P16.5A (LO 3, 5) AP During 2020, Financial Holdings, a public company, purchased equity securities for trading purposes. At December 31, 2020, the securities for Financial Holdings were as follows: Record equity investments; show statement presentation. Security Quantity Cost Market Value Sabo common shares 1,000 $15,000 $13,500 PYK $1.50 preferred shares 2,000 24,000 24,500 Total $39,000 $38,000 The following transactions with respect to Financial Holdings' investments occurred during 2021: 15 Purchased 1,500 common shares of Hazmi for $15.00 per share. The shares are designated as fair value through other comprehensive income. Received dividends on the PYK preferred shares of $1.50 per share. Sold 750 of the Sabo common shares for $15.75 per share. 5 Received dividends on the Sabo common shares of $2.50 per share. Jan. Mar. 20 June 15 Aug. Oct. 15 Received an additional 1,500 common shares of Hazmi as a result of a 2-for-1 stock split. At December 31, 2021, the securities held by Financial Holdings were trading on the TSX at the following prices: Security Price Sabo common shares $16.00 PYK $1.50 preferred shares 13.75 Hazmi common shares 7.00 Instructions a. Show how the securities would be reported on Financial Holdings' December 31, 2020, balance sheet. b. Record Financial Holdings' 2021 transactions and any required adjusting journal entries at December 31, 2021. c. Show how the investment income, gains, and losses would be reported on the statement of comprehensive income for the vear ended December 31, 2021. (Ignore income tax.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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P16.5A (LO 3, 5) AP During 2020, Financial Holdings, a public company, purchased equity securities for trading purposes. At December 31, 2020, the securities for Financial Holdings were as follows: Record equity investments; show statement presentation. Security Quantity Cost Market Value Sabo common shares 1,000 $15,000 $13,500 PYK $1.50 preferred shares Total 2,000 24,000 24,500 $39,000 $38,000 The following transactions with respect to Financial Holdings' investments occurred during 2021: Purchased 1,50o common shares of Hazmi for $15.00 per share. The shares are designated as fair value through other comprehensive income. Received dividends on the PYK preferred shares of $1.50 per share. 15 Sold 750 of the Sabo common shares for $15.75 per share. Received dividends on the Sabo common shares of $2.50 per share. Jan. 15 Mar. 20 June Aug. Oct. 15 Received an additional 1,500 common shares of Hazmi as a result of a 2-for-1 stock split. At December 31, 2021, the securities held by Financial Holdings were trading on the TSX at the following prices: Security Price Sabo common shares $16.00 PYK $1.50 preferred shares 13.75 Hazmi common shares 7.00 Instructions a. Show how the securities would be reported on Financial Holdings' December 31, 2020, balance sheet. b. Record Financial Holdings' 2021 transactions and any required adjusting journal entries at December 31, 2021. c. Show how the investment income, gains, and losses would be reported on the statement of comprehensive income for the year ended December 31, 2021. (Ignore income tax.)
Transcribed Image Text:P16.5A (LO 3, 5) AP During 2020, Financial Holdings, a public company, purchased equity securities for trading purposes. At December 31, 2020, the securities for Financial Holdings were as follows: Record equity investments; show statement presentation. Security Quantity Cost Market Value Sabo common shares 1,000 $15,000 $13,500 PYK $1.50 preferred shares Total 2,000 24,000 24,500 $39,000 $38,000 The following transactions with respect to Financial Holdings' investments occurred during 2021: Purchased 1,50o common shares of Hazmi for $15.00 per share. The shares are designated as fair value through other comprehensive income. Received dividends on the PYK preferred shares of $1.50 per share. 15 Sold 750 of the Sabo common shares for $15.75 per share. Received dividends on the Sabo common shares of $2.50 per share. Jan. 15 Mar. 20 June Aug. Oct. 15 Received an additional 1,500 common shares of Hazmi as a result of a 2-for-1 stock split. At December 31, 2021, the securities held by Financial Holdings were trading on the TSX at the following prices: Security Price Sabo common shares $16.00 PYK $1.50 preferred shares 13.75 Hazmi common shares 7.00 Instructions a. Show how the securities would be reported on Financial Holdings' December 31, 2020, balance sheet. b. Record Financial Holdings' 2021 transactions and any required adjusting journal entries at December 31, 2021. c. Show how the investment income, gains, and losses would be reported on the statement of comprehensive income for the year ended December 31, 2021. (Ignore income tax.)
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