Winston holdings purchased... Please provide answer the accounting question Winston Holdings purchased 12 shares of common stock securities at $1,200per share on March 10, 2017. The securities are classified as available-for-sale. By December 31, 2017, the fair value of the securities increased to$1,450 per share. Assume that no dividends are paid and that the companyhas a 25% tax rate on profits.What is the amount of the holding gain arising during the period after taxes,classified in Other Comprehensive Income (OCI) for the period endingDecember 31, 2017?

Computation of Pre-Tax Holding GainPre-Tax Holding Gain = (Fair Value per Share − Purchase Price per…

Answered: Winston Holdings purchased 12 shares of…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
On March 31, 2018, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50 million. KT’snet income for the year ended December 31, 2018, was $80 million. The fair value of the shares held by Chow was$35 million at December 31, 2018. KT did not declare or pay a dividend during 2018.Required:1. Prepare all appropriate journal entries related to the investment during 2018.2. Assume that Chow sold the stock on January 20, 2019 for $30 million. Prepare the journal entry Sanbornwould use to record the sale.
On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. JacksonIndustry’s net income for the year ended December 31, 2018, was $120 million. The fair value of the shares heldby Sanborn was $98 million at December 31, 2018. During 2018, Jackson declared a dividend of $60 million.Required:1. Prepare all appropriate journal entries related to the investment during 2018.2. Assume that Sanborn sold the stock on January 2, 2019 for $110 million. Prepare the journal entry Sanbornwould use to record the sale
On December 31, 2016, Sannibel Company acquired a 20% interest in Edelweiss Company for $135,000. During 2017, Edelweiss had net income of $75,000 and paid a cash dividend of $30,000. If you applied the fair value method, what would be the debit balance in the Investment in Stock: Edelweiss Company account at the end of 2017?
The esposito import company had 1 million shares of common stock outstanding during 2024. its income statement reported the following items: income from continuing operations, $6 million; loss from discontinued operations, $1.3 million. all of these amounts are net of tax. required: prepare the 2024 eps presentation for the esposito import company. Earnings per share Income from continuing operations Loss from discontinued operations Net income
The Esposito Import Company had 1 million shares of common stock outstanding during 2016. Its income statement reported the following items: income from continuing operations, $5 million; loss from discontinued operations, $1.6 million. All of these amounts are net of tax. Required: Prepare the 2016 EPS presentation for the Esposito Import Company.
On March 31, 2021, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50 million. KT’s net income for the year ended December 31, 2021, was $80 million. The fair value of the shares held by Chow was $35 million at December 31, 2021. KT did not declare or pay a dividend during 2021.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Assume that Chow sold the stock on January 20, 2022, for $30 million. Prepare the journal entry Chow would use to record the sale.
Determine how much The Bolton Corporation paid for its investment in Hunt common shares in January 2016 assuming that the investment represents a 25 percent ownership interest
Kristopher Company began operations in 2014. At 12/31/22, Kristopher had a debit balance of $25,000 in its Allowance for Adjustment to Market. At January 1, 2022, Kristopher owned the following securities, accounted for using the fair value method. Cost MJO Common (25,000 shares) $550,000 JKH Preferred (1,900 shares) 199,500 EKH Common (7,500 shares) 82,500 During 2022 the following events occurred: 4/3/22 Sold 3,000 shares of MJO for $75,000. 9/6/22 Acquired 1,500 shares of WVO Common for $25 per share. At 12/31/22, the fair values for Kristopher’s securities were: MJO Common, $24 per share JKH Preferred, $103 per share EKH Common, $13 per share WVO Common, $27 per share Required: Prepare any journal entries required in 2022 to record the securities activity, including any required adjusting entries at 12/31/22. Show any calculations.…
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Problems 19 through 21 should be viewed as independent situations. They are based on the following data: Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that date, Abernethy has the following trial balance: During 2017, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2018, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy’s common stock for $490,000 in cash. As of January 1, 2017, Abernethy’s land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018.

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