Provide answer this financial accounting question Woolly Holdings Inc. purchased 12,000 shares of Everest Corporation stock in2014 for $50 per share and classified the investment as securities available forsale.•The market value of Everest's stock was $65 per share on December 31,2015.⚫ The market value was $90 per share on December 31, 2016.••During 2017, Woolly Holdings sold all of its Everest stock at $120 pershare.In its 2017 income statement, what amount would Woolly Holdings report asa realized gain?

Step 1: Definition of Realized GainA realized gain is the profit earned when an asset or investment…

Answered: Woolly Holdings Inc. purchased 12,000…

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

See similar textbooks

Similar questions

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?
I want to this question answer general Accounting
Adams Industries holds 40,000 shares of FedEx common stock. On December 31, 2015, and December 31, 2016, the market value of the stock is $95 and $100 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2016 balance sheet?
Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1, 2015, for $300,000. During 2015, Sheboygan Corp. reported net income of $160,000 and paid total dividends of $60,000. If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2015, will be:
Company R pays $170,000 for a 30% interest in Company E on January 1, 2015. Company E’s total stockholders’ equity on that date is $500,000. The excess price is attributed to equipment with a 5-year life. During 2015, Company E reports net income of $35,000 and pays total dividends of $10,000. Answer the following questions assuming the investment is recorded under the equity method: a. What is Company R’s investment income for 2015? b. What is Company R’s investment balance on December 31, 2015? c. Explain, in words, the investment balance on December 31, 2015.
Global Inc. bought 18,000 shares of Creative Co.'s stock for $245,000 on June 8, 2012, classified as available for sale. Market value declined to $142,000 by December 31, 2012. Global reclassified this as trading securities in December 2013 when market value rose to $198,000. What effect on 2013 income should Global report for Creative Co. shares? correct answer
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.
(Equity Investment) On July 1, 2017, Selig Company purchased for cash 30% of the outstanding common stock of Spoor Corporation. Both Selig and Spoor have a December 31 year-end. Spoor Corporation, whose common stock is actively traded on the NASDAQ exchange, paid a cash dividend on November 15, 2017, to Selig Company and its other stockholders. It also reported its total net income for the year of $920,000 to Selig Company.InstructionsPrepare a one-page memorandum of instructions on how Selig Company should report the above facts in its December 31, 2017, balance sheet and its 2017 income statement. In your memo, identify and describe the method of valuation you recommend.Provide rationale where you can. Address your memo to the chief accountant at Selig Company
During 2017, Latvia Company purchased trading securities with the following cost and market value on December 31, 2017. Security Cost Market Value A – 1 000 shares 200 000 300 000 B – 10 000 shares 1 700 000 1 600 000 C – 20 000 shares 3 100 000 2 900 000 5 000 000 4 800 000 The entity sold 10 000 shares of security B on January 15, 2018, for P 150 per share. 1. What amount of unrealized gain or loss should be reported in income statement for 2017? 2. What amount should be reported as loss on sale of trading investment of 2018?
Twist Corp. had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017. Apr. 16 Purchased 5,000 shares of Lafayette Co. stock at $26 per share. July 7 Purchased 3,500 shares of CVF Co. stock at $51 per share. 20 Purchased 1,600 shares of Green Co. stock at $18 per share. Aug. 15 Received an $1.20 per share cash dividend on the Lafayette Co. stock. 28 Sold 3,000 shares of Lafayette Co. stock at $29 per share. Oct. 1 Received a $3.30 per share cash dividend on the CVF Co. shares. Dec. 15 Received a $1.40 per share cash dividend on the remaining Lafayette Co. shares. 31 Received a $2.70 per share cash dividend on the CVF Co. shares.
Please show the proper solution in a good accounting form.
Aurum Services, Inc. acquired 100,000 shares of Gamma Metals, Inc. on January 1, 2017. Gamma pays a cash dividend of $0.25 per share on March 2, 2017. With the current investment, Aurum Services, Inc. holds 8% of Gamma. In the journal entry on March 2, 2017, _______. A Long-term Investments—Available-for-Sale is credited B Long-term Investments—Held-to-Maturity is debited C Long-term Investments—Available-for-Sale is debited D Dividend Revenue is credited

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS