Available for Sale: It is combination of held to maturity and trading securities. It means this kind of securities can be sold before its maturity and can be hold till its maturity. To determine: 1. Prepare the December 31, 2015, year-end adjusting entry for the securities’ portfolio. 2. For each account in the entry for part 1, explain how it is reported in financial statements. 3. Prepare the April 6, 2016, entry when Journ sells one-half of these securities for $26,000

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 7QS

To determine

Available for Sale:

It is combination of held to maturity and trading securities. It means this kind of securities can be sold before its maturity and can be hold till its maturity.

To determine:

1. Prepare the December 31, 2015, year-end adjusting entry for the securities’ portfolio.

2. For each account in the entry for part 1, explain how it is reported in financial statements.

3. Prepare the April 6, 2016, entry when Journ sells one-half of these securities for $26,000

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 7QS

To determine

Available for Sale:

It is combination of held to maturity and trading securities. It means this kind of securities can be sold before its maturity and can be hold till its maturity.

To determine:

1. Prepare the December 31, 2015, year-end adjusting entry for the securities’ portfolio.

2. For each account in the entry for part 1, explain how it is reported in financial statements.

3. Prepare the April 6, 2016, entry when Journ sells one-half of these securities for $26,000

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 7QS

To determine

Available for Sale:

It is combination of held to maturity and trading securities. It means this kind of securities can be sold before its maturity and can be hold till its maturity.

To determine:

1. Prepare the December 31, 2015, year-end adjusting entry for the securities’ portfolio.

2. For each account in the entry for part 1, explain how it is reported in financial statements.

3. Prepare the April 6, 2016, entry when Journ sells one-half of these securities for $26,000

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 7QS

To determine