A corporation has invested $50,000 in the securities of other companies. At the end of the year, that corporation’s portfolio has a market value of $52,000. Describe where these securities would be shown on the annual financial statements and at what amount under each of the conditions described. 1. The investment is classified as trading securities. 2. The investment is classified as available for sale. 3. The investment is classified as held to maturity.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 10B, Problem 1YT

A corporation has invested $50,000 in the securities of other companies. At the end of the year, that corporation’s portfolio has a market value of $52,000. Describe where these securities would be shown on the annual financial statements and at what amount under each of the conditions described.

1. The investment is classified as trading securities.
2. The investment is classified as available for sale.
3. The investment is classified as held to maturity.

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Provide answer

MCQ

Exercise 3-12A (Algo) Conducting sensitivity analysis using a spreadsheet LO 3-5 Use the below table to answer the following questions. Selling Price$27.00 Variable 2,100 3,100 Fixed Cost Cost Sales Volume 4,100 Profitability 5,100 6,100 $25,700 8 $14,200 $33,200 $52,200 $71,200 $90,200 25,700 9 12,100 30,100 48,100 66,100 84,100 25,700 10 10,000 27,000 44,000 61,000 78,000 35,700 8 4,200 23,200 42,200 61,200 80,200 35,700 9 2,100 20,100 38,100 56,100 74,100 35,700 10 17,000 34,000 51,000 68,000 45,700 8 (5,800) 13,200 32,200 51,200 70,200 45,700 9 (7,900) 10,100 28,100 46,100 64,100 45,700 10 (10,000) 7,000 24,000 41,000 58,000 Required a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point. b. Determine the expected profit if Rundle projects the following data for Delatine: sales, 4,100 bottles; fixed cost, $25,700; and variable cost per unit, $10. c. Rundle is considering new circumstances that would change the conditions described in…

Answer 2

Textbook Question

Chapter 10B, Problem 1YT

A corporation has invested $50,000 in the securities of other companies. At the end of the year, that corporation’s portfolio has a market value of $52,000. Describe where these securities would be shown on the annual financial statements and at what amount under each of the conditions described.

1. The investment is classified as trading securities.
2. The investment is classified as available for sale.
3. The investment is classified as held to maturity.

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 10B, Problem 1YT

A corporation has invested $50,000 in the securities of other companies. At the end of the year, that corporation’s portfolio has a market value of $52,000. Describe where these securities would be shown on the annual financial statements and at what amount under each of the conditions described.

1. The investment is classified as trading securities.
2. The investment is classified as available for sale.
3. The investment is classified as held to maturity.

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 10B, Problem 1YT

A corporation has invested $50,000 in the securities of other companies. At the end of the year, that corporation’s portfolio has a market value of $52,000. Describe where these securities would be shown on the annual financial statements and at what amount under each of the conditions described.

1. The investment is classified as trading securities.
2. The investment is classified as available for sale.
3. The investment is classified as held to maturity.

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Answer 8

Expert Solution & Answer

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Explain that where the given securities would be shown on the annual financial statements and state the amount under each of the conditions explained.

Answer 12

Explanation of Solution

Situation 1:

In this situation, the securities will be shown in the current asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain on the income statement.

Situation 2:

In this situation, the securities will be shown depending on a company’s intent, either the current asset or the long-term asset section of the balance sheet at a value of $52,000. The write-up will be balanced with a $2,000 unrealized gain that will go directly to equity, as part of accumulated other comprehensive income.

Situation 3:

In this situation, the securities will be shown at their cost of $50,000 in the long-term asset section of the balance sheet (except the debt securities are maturing in the next year, in which case they would be reported under the current assets).

Answer 13

Ch. 10B - A corporation has invested 50,000 in the...Ch. 10B - Investments. (LO 6). In January 2010, Bowers...Ch. 10B - Prob. 2SEB Ch. 10B - Prob. 3EA Ch. 10B - Prob. 4EA Ch. 10B - Prob. 5EB Ch. 10B - Prob. 6EB

Concept explainers

Videos

Explanation of Solution

Want to see more full solutions like this?

Chapter 10B Solutions