Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities. Requirement 1; To prepare: Journal entry for the investment transactions.

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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 P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

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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 P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

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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 P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

Expert Solution & Answer

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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 P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

Expert Solution & Answer

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Answer 5

Chapter 15, Problem P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

Answer 6

Chapter 15, Problem P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

Answer 7

Chapter 15, Problem P15.22BPGB

To determine

Concept introduction: Available for sale (AFS) securities are those securities which are not classified as trading or held-to-maturity securities. In other words we can say that those securities do not fall under trading or held-to-maturity securities categories, are known as available for sale securities.

Requirement 1;

To prepare: Journal entry for the investment transactions.

Answer 8

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

Answer 9

To determine

Requirement 2;

To prepare: Preparation of T accounts.

Main solution:

Investment in Larsen’s Stock

Debit Credit

Beginning balance $800000 Cash (dividend revenue) $110000

Equity in Earnings of Parson $38500

Ending balance $728500

$838500 $838500

Long-term Investment-Available for Sale Securities

Debit Credit

Cash $42000

Unrealized holding gain on available for sale securities $18000 Ending balance $60000

$60000 $60000

Dividend Revenue

Debit Credit

Income Statement $3180 Cash $3180

$3180 $3180

Equity in Earnings of Larsen

Debit Credit

Investment in larsen’s Stock $38500

Ending balance $38500

$38500 $38500

Unrealized Holding gain on Available for Sale Securities

Debit Credit

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000 Long-term Investment – Available for Sale Securities $18000

$18000 $18000

Answer 10

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

Answer 11

To determine

Requirement 3;

To prepare: Partial balance sheet as at December 31, 2016.

Main solution:

Water Source Co.

Balance Sheet (Partial)

As on December 31, 2016

Assets

Non-Current assets;

Long-term Investment – Available for Sale Securities $60000

Investment in Larsen’s Stock $728500

Liabilities and stockholders’ equity;

Other Comprehensive Income-Accumulated Other Comprehensive Income $18000

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 15 - Prob. 1QC Ch. 15 - Which of the following investments is most likely...Ch. 15 - Prob. 3QC Ch. 15 - A company invested $45,000 in Yale Co. stock. The...Ch. 15 - Prob. 5QC Ch. 15 - Prob. 6QC Ch. 15 - Prob. 7QC Ch. 15 - Prob. 8QC Ch. 15 - Prob. 9QC Ch. 15 - Prob. 10QC

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Chapter 15 Solutions

Investment in Larsen’s Stock
Debit		Credit
Beginning balance	$800000	Cash (dividend revenue)	$110000
Equity in Earnings of Parson	$38500
		Ending balance	$728500
	$838500		$838500

Long-term Investment-Available for Sale Securities
Debit		Credit
Cash	$42000
Unrealized holding gain on available for sale securities	$18000	Ending balance	$60000
	$60000		$60000

Equity in Earnings of Larsen
Debit		Credit
		Investment in larsen’s Stock	$38500
Ending balance	$38500
	$38500		$38500

Unrealized Holding gain on Available for Sale Securities
Debit		Credit
Other Comprehensive Income-Accumulated Other Comprehensive Income	$18000	Long-term Investment – Available for Sale Securities	$18000

	$18000		$18000

Water Source Co.
Balance Sheet (Partial)
As on December 31, 2016
Assets
Non-Current assets;
Long-term Investment – Available for Sale Securities	$60000
Investment in Larsen’s Stock	$728500

Liabilities and stockholders’ equity;
Other Comprehensive Income-Accumulated Other Comprehensive Income	$18000