None The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions):Fair Value, December 31Equity InvestmentsCost20242025A Corporation shares$ 32$ 20B Corporation shares4747C Corporation sharesD Industries sharesTotals21$ 492051$ 1515256$ 119$ 125Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares onJune 1, 2025, for $21 million. On September 12, it purchased the C Corporation shares.Required:1. What is the effect of the sale of the A Corporation shares and the purchase of the C Corporation shares on Harlon's 2025 pretaxearnings?2. At what amount should Harlon's securities equity investment portfolio be reported in its 2025 balance sheet?Note: For all requirements, enter your answers in millions, (i.e., 10,000,000 should be entered as 10). Leave no cells blank - becertain to enter "O" wherever required.1.2. Amountmillionmillion

1) Effect on Pre-tax EarningsFirst, we compute if there's any gain or loss on the sale of A…

Answered: The investments of Harlon Enterprises…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions): Fair Value, Dec. 31 Equity Investments Cost 2021 2022 A Corporation shares $ 50 $ 29 N/A B Corporation shares 65 65 $ 67 C Corporation shares 30 N/A 29 D Industries shares 60 61 65 Totals $ 205 $ 155 $ 161 Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares on June 1, 2022, for $30 million. On September 12, it purchased the C Corporation shares. Required:1. What is the effect of the sale of the A Corporation shares and the purchase of the C Corporation shares on Harlon’s 2022 pretax earnings?2. At what amount should Harlon's securities equity investment portfolio be reported in its 2022 balance sheet? (For all requirements, enter your answers in millions, (i.e., 10,000,000 should be entered…
Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…
How much is the unrealized gain (loss) recognized in other comprehensive income on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount of P360,000. Cost Alaska Co. preference shares P200,000 160,000 Valdez Co. ordinary shares Totals P360,000 The shares did not qualify for recognition as held for trading, thus they were classified as investment in equity securities measured at fair value through other comprehensive income. On December 31, 20x1, the portfolio of Karen Co. comprised the following. Fair value - 12/31/x1 Alaska Co. preference shares P240,000 60,000 Valdez Co. ordinary shares Total P300,000 On December 31, 20x2, the portfolio of Karen Co. comprised the following: Fair value-12/31/x2 Alaska Co. preference shares P220,000 Valdez Co. ordinary shares 180,000 Total P400,000 On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transaction costs. 60,000 100,000 O (60,000)
Owe
Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
How much is the unrealized gain (loss) accumulated in equity as of December 31, 20x2? Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount of P360,000. Cost Alaska Co. preference shares P200,000 160,000 Valdez Co. ordinary shares Totals P360,000 The shares did not qualify for recognition as held for trading, thus they were classified as investment in equity securities measured at fair value through other comprehensive income. On December 31, 20x1, the portfolio of Karen Co. comprised the following. Fair value - 12/31/x1 Alaska Co. preference shares P240,000 60,000 Valdez Co. ordinary shares Total P300,000 On December 31, 20x2, the portfolio of Karen Co. comprised the following: Fair value - 12/31/x2 Alaska Co. preference shares P220,000 180,000 Valdez Co. ordinary shares Total P400,000 On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transaction costs. 0 100,000 40,000 O (40,000)
Carlin Enterprises purchased 2,000 shares of the 2,000,000 common shares outstanding in Captain Inc. Carlin intends to hold on to this investme for the foreseeable future. How should this investment be classified on the books of Carlin? O trading equity investment O held-to-maturity debt investment O held-to-maturity equity investment O available-for-sale equity investment Question 23 Held-to-maturity securities O affects other comprehensive income and appear as financing activities on the statement of cash flows. are never disclosed in the notes to financial statements
During 2022, Merry Co. purchased the following shares which it classified as FVPL investment: Shares No. of Shares Cost per share at the time of purchase Fair value per share on December 31, 2022 A 1,000 P100 P80 B 5,000 P20 P25 C 10,000 P4 P5 How much unrealized gain or loss will be recognized in the Profit or Loss Statement for these investments on December 31, 2022?
How much is the cost of investment ?
The owners of a private company wish to dispose of their entire investment in the company. The company has an issued share capital of $1m of $0.50 nominal value ordinary shares. The owners have made the following valuations of the company's assets and liabilities: $m Non-current assets (book value) Current assets Non-current liabilities Current liabilities 30 18 12 10 The net realisable value of the non-current assets exceeds their book value by $4m. The current assets include $2m of accounts receivable which are thought to be irrecoverable. What is the minimum price per share that the owners should accept for the company (to the nearest whole $)?
Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
Brave Industries owned investment securities with a book value of $20 million on August 12. At that time, Brave's board of directors declared a property dividend consisting of these securities. The fair value of the securities was as follows: Declaration --- August 12 Date of record --- September 1 Distribution date --- September 20 By how much is total stockholder' equity reduced by the property dividend? $31 million $30 million $27 million $20 million $28 million 30 million 31 million

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