AccountingUse the following information for the questionBelow is information about severalinvestments in debt securities. The companycarried no investments prior to 2020. Thefluctuations in their fair values are notconsidered permanent. No investments weresold in 2020 or 2021.DebtOriginalFair ValueFair ValueInvestments:Cost12/31/202012/31/2021Held to$370,000$375,000$400,000MaturityDebt InvTrading DebtInvestments$135,000$139,000$175,000Available-$140,000$130,000$150,000for-SaleDebt InvTotal$645,000$644,000$725,000Required: What total unrealized gain or losswould the company report in its 2021 incomestatement relative to its investments in debtsecurities?

1) Held to maturity debt investment: If the debt instrument held to maturity, it is recorded by…

Answered: Required: What total unrealized gain or…

Required: What total unrealized gain or loss would the company report in its 2021 income statement relative to its investments in debt securities?

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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1. Investments in debt securities are classified for accounting purposes as: A. Financial asset at amortized cost (AC), fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVPL) B. Financial asset at amortized cost (AC) or fair value through other comprehensive income (FVOCI) only C. Trading, Available-for-Sale (AFS) or Held-to-Maturity (HTM) D. Available-for-Sale (AFS) or Held-to-Maturity (HTM) only
How shall an entity subsequently measure financial liabilities? Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Q: Does U.S. GAAP allow fair value option for financial assets and liabilities? Q; What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? Q: How does IFRS 9 address this “own credit” issue?
Which of the following reclassifications of financial assets is permitted under PFRS 9? a. reclassification out of designated at FVPL to amortized cost b. reclassification out of the FVOCI (election) measurement category to financial assets measured at FVPL c. reclassification out of held for trading equity securities to amortized cost d. reclassification from amortized cost and to FVPL
Why are unrealized gains and losses on trading securities reported in the incomestatement?
17. When a debt investment at FVOCI is reclassified to FVPL, an entity willa. Remeasure the investment to the original cost and eliminate the cumulative unrealized gain or loss in OCI.b. Transfer the cumulative unrealized gain or loss to retained earningsc. The cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.d. The effective rate at the date of reclassification shall be the basis for interest income to be recognized in subsequent periods.
Indicate how unrealized holding gains and losses shouldbe reported for debt investments classified as trading,available-for-sale, and held-to-maturity.
Which items are NOT other comprehensive income? 1. Unrealized gain/loss on available-for-sale debt securities 2. Unrealized gain/loss on trading debt securities 3. Foreign currency translation adjustments 4. Unrealized gain/loss on derivatives designated as a fair value hedge 5. Unrealized gain/loss on pension obligation. 6. Unrealized gain/loss on equity securities O 2, 4, 6 O 1, 2, 3, 4 O 1, 2, 6 O 3, 4, 5
1. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: How much unrealized gain (loss) is to be reflected in the statement of changes in equity and statement of comprehensive income at yearend 2020? 2. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: What is the carrying value of the investment on December 31, 2020? 3. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: Determine the gain or (loss) to be recorded upon the sale of the investment.
What is the debt-to-asset ratio of Company B in 2022? What is the debt-to-equity ratio of Company A in 2021
Using the information above, what is the audited net unrealized loss/gain on marketable equity securities in its 2021 statement of shareholders’ equity?
Sunland Company reported the following information for 2025: Sales revenue Cost of goods sold Operating expenses Unrealized holding gain on available-for-sale debt securities Cash dividends received on the securities O $490300. O $404600. $480700. $2420000 O $85700. 1754000 271000 85700 For 2025, Sunland would report comprehensive income (ignoring tax effects) of 9600