Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter A, Problem 5E
To determine
Journalize the entries related to investment in available-for-sale securities.
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On December 31, 2017, Nameless Inc. provided you with the following information regarding its trading securities.
December 31, 2017
Investments (Trading) Cost Fair Value
SKN Inc. stock $ 40,000 $ 46,000
Derby Co. stock 101,000 99,500
Google Corp. stock 31,000 34,500
Total of portfolio $172,000 $ 180,000
All of the securities were purchased during 2017 and < 20% of total share of the company.
During 2018, Nameless sold its Google Corp. stock for $33,200. The fair value of the stock on December 31, 2018, was: SKN Inc. stock—$47,600; Derby Co. stock—$95,400.
(3a) Prepare the adjusting journal entry needed on December 31, 2017.
(3b) Prepare the journal entry to record the sale of the Google Corp. stock during 2018.
(3c) Prepare the adjusting journal entry needed on December 31, 2018.
Prepare the journal entries for an investment accounted for under the equity method.
a. On January 2, 2017, Workowski Corporation purchased 55,000 shares (26%) of Wendy Company at a cost of $8 per share.
b. At the end of 2017, Wendy Company reported net income of $350,000 (Workowski’s share is 26%).
c. Wendy Company reported a $215,000 net loss for 2017. Workowski’s share of the loss is 26%.
d. In early 2018, Wendy Company paid a $75,000 dividend. Workowski’s share is 26%.
Chapter A Solutions
Financial Accounting
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
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