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.
Hedge: Hedge is an investment to reduce the risk arising out of the changes in the price movements of the assets.
Fair value hedge: Fair value hedge eliminates the risk of changes or volatility in fair value of recognized asset or a liability or an firm’s commitment which affects the profit or loss.
To determine the situation under which unrealized holding gain or loss on inventory reported in income.

Want to see the full answer?
Check out a sample textbook solution
Chapter 17 Solutions
INTERMEDIATE ACCOUNTING WPNG MULTI-S
- Right answerarrow_forwardHow much gross profit was realized from this sale on accounting question?arrow_forwardOn January 1, 2023, Everest Textiles acquired a patent for $300,000 giving it the right to manufacture a new eco-friendly fiber. The patent had a remaining legal life of 14 years, but Everest expects to use it for 7 years. Additionally, Everest purchased machinery for $120,000 to process the fiber. The machinery has a physical life of 10 years, but Everest will use it only for 7 years, at which point it expects to sell it for $30,000. The company applies straight-line amortization and depreciation. What is the total amount to expense in 2026 related to the patent and machinery?arrow_forward
- Financial accountingarrow_forwardCrystal Bay Hospital's central supply tracks sterile items using a batch code system. When opening count shows 240 items, used items logged as 185, damaged items recorded as 15, but closing count reveals 25 items, what is the unaccounted variance?arrow_forwardRolex Industries uses a predetermined overhead rate based on direct labor hours. The company applies overhead at a rate of $9 per direct labor hour, which consists of a variable overhead rate of $5 per direct labor hour and a fixed overhead rate of $4 per direct labor hour. The budgeted fixed overhead costs for the period total $60,000. Using the budgeted direct labor hours, calculate the total budgeted overhead for the period.arrow_forward
- Dior Enterprises has a beginning equity of $315,000, net income of $64,000, dividends of $50,000, and investments by owners in exchange for stock of $10,000. What is the ending equity? A. $339,000 B. $352,000 C. $275,000 D. $329,000arrow_forwardWhat is your estimate of an appropriate stock price ?arrow_forwardQuick answer of this accounting questionarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





