McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date. Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000 Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000 Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000 On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.

McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date. Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000 Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000 Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000 On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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Flounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…
Pina Colada Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 50,500 common shares of Yuen Inc. $313,100 $202,000 3,800 preferred shares of Monty Ltd. 1,650 common shares of Oakwood Inc. 144,400 152,000 148,500 147,675 On October 8, 2023, the Yuen shares were sold for $6.20 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $44.40 per share. Pina Colada pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,950; Patriot $118,250; and Oakwood $167,475. Pina Colada prepares financial statements every quarter. (a) Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023. (Credit account titles…
SLC Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model. SLC Inc. prepares financial statements every quarter. At Sept 30, 2021, the end of the company’s third quarter, the following information was reported: Investment Cost Fair Value 50,000 Common Shares – Seneca Inc. $215,000 $200,000 3,500 Preferred Shares – Loyalist Inc. $135,000 $140,000 2,000 Common Shares – Algonquin Inc. $180,000 $179,000 Transactions that occurred in the fourth quarter: Oct 8, 2021 The Seneca Shares were sold for $4.30 per share Nov 16, 2021 3,000 common shares of Humber Inc. were purchased at $44.50 per share SLC Inc. pays a 1% commission on purchase and sales of all securities. At the end of the fourth quarter, on December 31, 2021, the fair value of the shares were as follows: Investment Fair Value Loyalist Inc. $106,000 Algonquin Inc. $203,000 Humber Inc. $122,000 Instructions: Prepare the journal entries to record the sale, purchase and…
Shamrock Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Horton, Inc. common (5,340 shares) Monty, Inc. preferred (3,430 shares) Oakwood Corp.common (1,040 shares) Cost $229,620 133,770 190,320 Fair Value $214,770 140,490 189,290 On October 10, 2020, the Horton shares were sold at a price of $53 per share. In addition, 3,210 shares of Patriot common stock were acquired at $54 per share on November 2, 2020. The December 31, 2020, fair values were Monty $105,670, Patriot $139,790, and Oakwood $204,600. Date Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
JKL, Inc. had the following portfolio of investments as of January 1, 2022: Investment Balance ABC Co. bonds P1,530,000 DEF Company stocks 2,325,000 GHI Corp. stocks 3,600,000 Additional information on the above investments is shown below: The ABC Co. bonds are accounted for as a financial asset at fair value through profit or loss. The company has 1,500 bonds with face value of P1,000 that pay interest of 8% every March 1 and September 1 of each year until 2025. The investment's fair value (dirty price) at year-end is P1,525,000. ● The DEF Company stocks are accounted for as a financial asset at fair value through profit or loss. 15,000 shares were held by the company at the beginning of the year. On May 9, 2022, the company purchased additional 10,000 shares for P1,900,000 which includes P100,000 of transaction costs. DEF Company also declared cash dividends of P5/share on April 15, 2022 to stockholders as of record date May 15, 2022 and was received by the company on May 31, 2022.…
Myrnam Co. has the following investments held for trading on December 31, 2021: Carrying Value 185,000 125,000 230,000 540,000 Fair Value Security Co. M common shares FVTPL Co. N preferred shares FVTPL Co. P common shares Total Category 160,000 140,000 190,000 490,000 FVTOCI Instructions: a. Prepare the adjusting entries required at December 31 to report the above investments at fair value. b. Show the financial statement presentation of the investmehts and holding gains and losses that result from fair value adjustments at December 31, 2021. (Ignore income tax.) c. Assuming that on April 25, 2022, Myrnam sold Co. M common shares for $160,000, Co. N preferred shares for $135,000, and Co P common shares for $200,000, prepare the journal entries required to record these transactions.
Pecan Company has the following portfolio of investment securities at September 30, 2025, its last reporting date. Trading Securities Perry, Inc. common (12,000 shares) Platter, Inc. common (6,100 shares) Pokey Corp. preferred (1,000 shares) Cost $367,000 244,000 Date 94,000 Fair Value $351,000 248,000 On November 5, 2025, the Platter shares were sold at a price of $42 per share. In addition, 8,000 shares of Patriot common stock were acquired at $37 per share on November 26, 2025. The December 31, 2025, fair values were: Perry $348,000, Pokey $90,000, and the Patriot common $301,000. The Fair Value Adjustment account was at zero (0) as of September 30, 2025. 89,000 Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for…
(Equity Securities Entries) McElroy Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date. Investment Securities Cost Fair Value Horton, Inc. common (5,000 shares) $215,000 $200,000 Monty, Inc. preferred (3,500 shares) 133,000 140,000 Oakwood Corp. common (1,000 shares) 180,000 179,000 On October 10, 2020, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2020. The December 31, 2020, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2020.
Pacers Corp. Has the following portfolio of investment securities at September 30, 2018: Trading Securities Cost Fair Value Fogel Inc., common(5000 shares) $225,000 $200,000 Petra Inc., preferred(3,500 shares) Tim Corp., common(1,000 shares) 133,000 140,000 180,000 179,000 On October 10, 2018, the Fogel shares were sold at a price of $54 per share. In addition, 3,000 shares of Tigres common stock were purchased at $59.50 per share on November 2, 2018. The December 31, 2018 fair values were: Petra $96,000; Tigres $132,000, and Tim $193,000. All of the securities are classified as trading. wwwv Required: a)Prepare the journal entries to record the sale, purchase, and adiusting entries relating to the trading securities in the last quarter of 2018 and post the entries to ledger accounts.
Pacers Corp. Has the following portfolio of investment securities at September 30, 2018: Trading Securities Cost Fair Value Fogel Inc., common(5000 shares) $225,000 $200,000 Petra Inc., preferred(3,500 shares) 133,000 140,000 Tim Corp., common(1,000 shares) 180,000 179,000 On October 10, 2018, the Fogel shares were sold at a price of $54 per share. In addition, 3,000 shares of Tigres common stock were purchased at $59.50 per share on November 2, 2018. The December 31, 2018 fair values were: Petra $96,000; Tigres $132,000, and Tim $193,000. All of the securities are classified as trading. Required: a)Prepare the journal entries to record the sale, purchase, and adjusting entries relating to the trading securities in the last quarter of 2018 and post the entries to ledger accounts.
On January 1, 2020, A Corp. had the following investments: Classification Investment MarketValue MaturityValue Cost Trading K Inc. bonds $1,900 $1,800 Trading S Co. bonds 3,100 3,000 Held-to-maturity G Inc. bonds (due 12/31/2022) $10,000 9,700 During the year, A Corp. acquired M Co. bonds for $1,000 and classified it as trading. At year-end, the M Co. bonds have fair market value of $1,200. The K Inc. investment on December 31 had a fair market value of $2,500. The S Co. investment had a December 31 market value of $3,500, and the G Inc. bonds had a December 31 market value of $9,850. Required: Indicate the balance sheet classification and where unrealized holding gains/losses would appear on the December 31, 2020 financial statements for each investment. Classification Balance SheetValuation : Trading Securities (at fair value) $fill in the blank 2 : Held-to-maturity (amortized cost) $fill in the blank 4
Accounting Swifty Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2020, the end of the company’s third quarter: Investment Cost Fair Value 53,000 common shares of Yuen Inc. $355,100 $212,000 4,300 preferred shares of Monty Ltd. 163,400 172,000 1,900 common shares of Oakwood Inc. 171,000 170,050 On October 8, 2020, the Yuen shares were sold for $6.70 per share. On November 16, 2020, 3,000 common shares of Patriot Corp. were purchased at $44.90 per share. Swifty pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2020, the fair values of the shares held were as follows: Monty $103,700; Patriot $119,500; and Oakwood $192,850. Swifty prepares financial statements every quarter. (a) Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2020.…