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Sunland Technologies Inc. held a portfolio of shares and bonds that it accounted for using the fair value through other compre income model at December 31, 2023. This was the first year that Sunland had purchased investments. In part due to Sunland inexperience, by December 31, 2023, the market value of the portfolio had dropped $29,700 below its original cost. Sunland m the necessary adjustments at December 31, 2023, and was determined to hold the securities until the unrealized loss from 201 be recovered. By December 31, 2024, Sunland's goal of recovery had been realized and the original portfolio of shares and bom a fair market value $6,600 higher than the original purchase costs. Sunland's income tax rate is 30% for all years. Assume that . gains that will ultimately be realized on the sale of the shares and bonds are taxable as ordinary income when they are realized Sunland applies IFRS.

Sunland Technologies Inc. held a portfolio of shares and bonds that it accounted for using the fair value through other compre income model at December 31, 2023. This was the first year that Sunland had purchased investments. In part due to Sunland inexperience, by December 31, 2023, the market value of the portfolio had dropped $29,700 below its original cost. Sunland m the necessary adjustments at December 31, 2023, and was determined to hold the securities until the unrealized loss from 201 be recovered. By December 31, 2024, Sunland's goal of recovery had been realized and the original portfolio of shares and bom a fair market value $6,600 higher than the original purchase costs. Sunland's income tax rate is 30% for all years. Assume that . gains that will ultimately be realized on the sale of the shares and bonds are taxable as ordinary income when they are realized Sunland applies IFRS.

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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Sunland Technologies Inc. held a portfolio of shares and bonds that it accounted for using the fair value through other comprehensive income model at December 31, 2023. This was the first year that Sunland had purchased investments. In part due to Sunland's inexperience, by December 31, 2023, the market value of the portfolio had dropped $29,700 below its original cost. Sunland recorded the necessary adjustments at December 31, 2023, and was determined to hold the securities until the unrealized loss from 2023 could be recovered. By December 31, 2024, Sunland's goal of recovery had been realized and the original portfolio of shares and bonds had a fair market value $6,600 higher than the original purchase costs. Sunland's income tax rate is 30% for all years. Assume that any gains that will ultimately be realized on the sale of the shares and bonds are taxable as ordinary income when they are realized. Sunland applies IFRS. (a) Prepare the journal entries at December 31, 2023, to accrue the unrealized loss on Sunland's securities and the related incorne tax. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts.) Date Account Titles and Explanation December 31, 2023 December 31, 2023- (To record fair value adjustment). Debit Credit
Transcribed Image Text:Sunland Technologies Inc. held a portfolio of shares and bonds that it accounted for using the fair value through other comprehensive income model at December 31, 2023. This was the first year that Sunland had purchased investments. In part due to Sunland's inexperience, by December 31, 2023, the market value of the portfolio had dropped $29,700 below its original cost. Sunland recorded the necessary adjustments at December 31, 2023, and was determined to hold the securities until the unrealized loss from 2023 could be recovered. By December 31, 2024, Sunland's goal of recovery had been realized and the original portfolio of shares and bonds had a fair market value $6,600 higher than the original purchase costs. Sunland's income tax rate is 30% for all years. Assume that any gains that will ultimately be realized on the sale of the shares and bonds are taxable as ordinary income when they are realized. Sunland applies IFRS. (a) Prepare the journal entries at December 31, 2023, to accrue the unrealized loss on Sunland's securities and the related incorne tax. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts.) Date Account Titles and Explanation December 31, 2023 December 31, 2023- (To record fair value adjustment). Debit Credit
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