Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain. An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss. Fair value: Fair value is a selling price which is agreed by the buyer and seller. Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains. (a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option. Given information: All the information related to L Company is provided in the question document.

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Answer 1

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

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At year-end, Simple has cash of $12,000, current accounts receivable of $60,000, merchandise inventory of $37,200, and prepaid expenses totaling $5,200. Liabilities of $24,000 must be paid next year. Assume accounts receivable had a beginning balance of $20,000 and net credit sales for the current year totaled $2,400,000. How many days did it take Simple to collect its average level of receivables? (Assume 365 days/year.)

Perry Industries is preparing its direct labor budget for the next two months. Each unit of output requires 0.85 direct labor hours. The direct labor rate is $12 per direct labor hour. The production budget calls for producing 7,200 units in June and 7,000 units in July. The company guarantees its direct labor employees a 40-hour paid work week, and with the current workforce, this means they are committed to paying for at least 5,900 labor hours per month, even if there isn't enough work to occupy all that time. What would be the total combined direct labor cost for the two months?

Answer 2

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 6

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

Answer 7

Chapter 17, Problem 19E

To determine

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Fair value: Fair value is a selling price which is agreed by the buyer and seller.

Equity investment: An investment made in shares and is held to earn some income in the form of dividends and capital gains.

(a) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investment in A Company stock if it chooses to report this security using the fair value option.

Given information: All the information related to L Company is provided in the question document.

Answer 8

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 9

To determine

(b) To prepare: To prepare the entry that would L make at December 31, 2017, to record the investments in the L and W corporations, assuming that L did not select the fair value option for these investments.

Given information: All the information related to L Company is provided in the question document.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 17 - Prob. 1Q Ch. 17 - 2. What purpose does the variety in bond features...Ch. 17 - 3. What is the cost of a long-term investment in...Ch. 17 - 4. Identify and explain the three types of...Ch. 17 - 5. When should a debt security be classified as...Ch. 17 - 6. Explain how trading debt securities are...Ch. 17 - 7. At what amount should trading,...Ch. 17 - Prob. 8Q Ch. 17 - 9. If the bonds in Question 8 are classified as...Ch. 17 - Prob. 10Q

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