FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter C, Problem 8E
To determine
Investment:
It is a financial term which refers to spend or deposit money to get the financial benefits.
The different ways in which a firm can invest are mentioned below:
- Long-term investments
- Short-term investments
Short-term investments:
It includes such investments which are highly liquid in nature as these can be convert in form of cash easily during the period of 1 year.
It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.
Rules of Journal Entry:
The rules for journal entry are defined by 5 accounting components,
- Assets: Increase in asset should be debit and decrease should be credit.
- Liabilities: Increase in liabilities should be credit and decrease should be debit.
- Equity: Increase in Equity should be credit and decrease should be debit.
- Expense: Increase in expense should be debit and decrease should be credit.
- Revenue: Increase in revenue should be credit and decrease should be debit.
Financial Statements:
It refers to the statements that are being made to show the financial results and financial position of a business or a company.
To prepare:
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Missing Statement Items, Available-for-Sale Securities
Highland Industries Inc. makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are as follows:
There were no dividends.
Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.
Highland Industries Inc.
Selected Income Statement Items
For the Years Ended December 31, Year 2 and Year 3
Year 2
Year 3
Operating Income (Loss)
$fill in the blank a4e4cbfe902c023_1
$fill in the blank a4e4cbfe902c023_2
Gain (Loss) from Sale of Investments
6,250
(12,500)
Net Income (Loss)
$fill in the blank a4e4cbfe902c023_3
$(17,190)
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Highland Industries Inc.
Selected Balance Sheet Items
December 31, Year 1, Year 2, and Year 3
Dec. 31, Year 1
Dec.…
A credit ending balance in the account Fair Value Adjustment-Trading Debt Securities, after the year-end
adjusting entry, should be interpreted as equal to
the net realized holding loss for that year only.
the net unrealized holding loss since purchasing the Trading portfolio of debt securities.
the net realized holding loss since purchasing the Trading portfolio of debt securities.
the net unrealized holding loss for that year only.
Hello tutor provide answer this general accounting question
Chapter C Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. C - Prob. 1MCQCh. C - Prob. 2MCQCh. C - Prob. 3MCQCh. C - Prob. 4MCQCh. C - Prob. 5MCQCh. C - Prob. 1DQCh. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Prob. 4DQCh. C - Prob. 5DQ
Ch. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQCh. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Prob. 1QSCh. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Prob. 13QSCh. C - Prob. 14QSCh. C - Prob. 15QSCh. C - Prob. 16QSCh. C - Prob. 17QSCh. C - Prob. 18QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Transactions in held-to-maturity, trading, and...Ch. C - Prob. 12ECh. C - Prob. 13ECh. C - Prob. 14ECh. C - Prob. 15ECh. C - Prob. 16ECh. C - Prob. 17ECh. C - Prob. 1PSACh. C - Prob. 2PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. 5PSACh. C - Prob. 6PSACh. C - Prob. 1PSBCh. C - Prob. 2PSBCh. C - Prob. 3PSBCh. C - Prob. 4PSBCh. C - Prob. 5PSBCh. C - Prob. 6PSBCh. C - Prob. 1SPCh. C - Prob. 1GLPCh. C - Prob. 2GLPCh. C - Prob. 1AACh. C - Prob. 2AACh. C - Prob. 3AACh. C - Prob. 1BTNCh. C - Prob. 2BTNCh. C - Prob. 5BTN
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- 14. For available-for-sale securities, a decline in value due to a temporary decline in market value below cost is a. disclosed in the financial statements by means of a footnoteb. disclosed as a reduction from stockholders' equity on the balance sheetc. disclosed as a loss on the income statementd. not disclosed because the decline in value is only temporaryarrow_forwardPlease explain in detailarrow_forwardMissing Statement Items, Trading Investments 1. EX.15-01 JED Capital Inc., makes investments in trading securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are 2. EX.15-02 shown in the income statement and balance sheet below: 3. EX.15-03 There were no dividends. Determine the missing items. 4. EX.15-06 JED Capital Inc. 5. EX.15-08.ALGO Selected Income Statement Items 6. EX.15-11.ALGO For the Years Ended December 31, Year 2 and Year 3 Year 2 Year 3 7. EX.15-14.ALGO Operating Income $ Unrealized Gain (Loss) (3,400) Net Income $23,800 JED Capital Inc. Selected Balance Sheet Items December 31, Year 1, Year 2, and Year 3 Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Trading Investments, at Cost $209,200 $248,200 $292,500 Valuation Allowance for Trading Investments (10,200) 15,300 Trading Investments, at Fair Value Retained Earnings $246,600 $326,300arrow_forward
- 2 Required information Problem 15-3A (Algo) Debt Investments in available-for-sale securities; unrealized and realized gains and losses LO P3 [The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Fair Value $ 492,000 155,000 642,140 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,820. July 6 Purchased Company X bonds for $122,100. November 13 Purchased Company Z notes for $267,300. December 9 Sold all of the Company A bonds for $524,800. Fair values at December 31 are B, $82,300; C, $603,800; X. $120,000; and Z, $276,000. Company B notes Company C bonds Problem 15-3A (Algo) Part 1 and 2 Cost $ 534,100 159, 140 662,400 Required: 1. Prepare journal entries to record these transactions, including the December…arrow_forwardAccount assistance Cash Debt Investments Dividend Revenue Fair Value Adjustment-Available-for-Sale Fair Value Adjustment-Stock Fair Value Adjustment-Trading Gain on Sale of Debt Investments Gain on Sale of Stock Investments Interest Receivable Interest Revenue Loss on Sale of Debt Investments Loss on Sale of Stock Investments No Entry Revenue from Stock Investments Short-Term Investments Stock Investments Unrealized Gain or Loss-Equity Unrealized Gain or Loss-Incomearrow_forwardN4arrow_forward
- The Pandora Company made the following errors on 12/31/19: • Recorded the expiration of prepaid insurance by debiting Sales Revenue and crediting Depreciation Expense for $12. • Recorded the issuance of 10-year bonds at par value by debiting Unearned Revenue and crediting Common Stock for $13. 12/31/19 Total Stockholders' Equity is in error by: Select one: a. $12 O b. $0 c. $13 d. $2 e. $25arrow_forwardWhich of the following statements is not true of the fair-value method of accounting for marketable securities? Select one: A. The investment account is recorded at current fair value on the balance sheet. B. Interim changes in the investments’ fair value may or may not affect income depending on the securities’ classification. C. This method is used when the reporting company generally owns less than 20% of the investee company. D. Dividends are treated as a return of the capital invested. E. None of the abovearrow_forward6. Unrealized gains and losses on investments in trading securities are reported a. as a current assetb. on the income statementc. on the balance sheet as part of stockholders' equityd. as a contra assetarrow_forward
- 4 Comprehensive income includes all changes in equity during a period EXCEPT ______________ Select one: a. those resulting from investments by owners and distributions to owners. b. unrealized gains and losses on available for sale securities. c. gains and losses from irregular items. d. gains and losses from discontinued operations.arrow_forwardIncreases in the fair value of unexercised share options after the vesting period shall be A.directly recognized in profit or loss in full B.treated as a prior period adjustment C.ignored D.treated as change in accounting estimatearrow_forwardList of Accounts Cash Debt Investments Dividend Revenue Fair Value Adjustment-Available-for-Sale Fair Value Adjustment-Stock Fair Value Adjustment-Trading Gain on Sale of Debt Investments Gain on Sale of Stock Investments Interest Receivable Interest Revenue Loss on Sale of Debt Investments Loss on Sale of Stock Investments No Entry Revenue from Stock Investments Short-Term Investments Stock Investments Unrealized Gain or Loss-Equity Unrealized Gain or Loss-Incomearrow_forward
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