[The following information applies to the questions displayed below.]The accounting records of Jamaican Importers, Incorporated, at January 1,2024, included the following:Assets:Investment in IBM common sharesLess: Fair value adjustment$ 1,545,000(165,000)$ 1,380,000No changes occurred during 2024 in the investment portfolio.2. Prepare appropriate adjusting entry(s) at December 31, 2024, assuming the fair value of theIBM common shares was $1,390,000.Note: If no entry is required for a transaction/event, select "No journal entry required" inthe first account field.View transaction listJournal entry worksheet1Record the fair value adjustment assuming the fair value of the IBM commonshares was $1,390,000.Note: Enter debits before credits.

In this scenario, Jamaican Importers, Incorporated, holds an investment in IBM common shares, which…

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Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 2PB

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Urgently required answer to following: The following information related to stock investments of the Aladdin Corp at December 31, 2020 appears below. Name Cost Market Value A Corporation $35,000 $41,000 B Corporation 42,000 40,000 C Corporation 20,000 22,000 The balance in the fair value adjustment account prior to the 2020 year-end adjustment was a $2,000 debit balance. Instructions: 1. Determine the balance in the fair value adjustment account as of December 31, 2020 after adjustment 2. Prepare the adjusting journal entry at December 31, 2020 to record the unrealized gain or loss. 3. On April 15, 2021, A Corporation stock was sold for $43,000. Prepare the journal entry for the sale.
Entity A invested in 38,600 shares of a listed company on 1 October 2019 at a cost of $3.95 per share. On 31 December 2019, the shares have a market value of $3.45. Entity A is not planning on selling these shares in the short term and elects to hold them as Fair Value through Other Comprehensive Income. REQUIRED: (1) Measure the amounts of the financial asset recognised in the Statement of Financial Position as at 31 December 2019. (2) Measure the amounts recognised in the Statement of Profit or Loss for the financial asset of the year 2019. (3) Measure the amounts of the Fair Value Reserve recognised in the Statement of Financial Position as at 31 December 2019
[The following information applies to the questions displayed below.] The accounting records of Jamaican Importers, Inc., at January 1, 2021, included the following: Assets: Investment in IBM common shares $ 2,245,000 Less: Fair value adjustment (235,000 ) $ 2,010,000 No changes occurred during 2021 in the investment portfolio Required:1. Prepare appropriate adjusting entry(s) at December 31, 2021, assuming the fair value of the IBM common shares was: $1,429,000 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. How much is the realized gain or loss on the sale of Djursholm Corp. ordinary shares on April 1, 2022? 2. The 2,100 ordinary shares of Stockholm Corp. purchased on May 1, 2022, should be initially measured at how much? 3. Sweden’s December 31, 2022, statement of financial position should report financial assets at fair value through other comprehensive income at what amount?
On its December 31, 2020, balance sheet, Cullumber Company reported its investment in equity securities, which had cost $720000, at fair value of $656000. At December 31, 2021, the fair value of the securities was $693000. What should Cullumber report on its 2021 income statement as a result of the increase in fair value of the investments in 2021?
As of 12/31/2020 Bank of America had Stockholders Equity on their Balance Sheet at $216,324 Milllion; the market capitalization of B of A at year end was $214,324. Is B of A required to write-down their book value to fair value? What authoritative literature addresses this topic? Provide FASB codification.
Hampton Company has a debit balance in the Fair Value Adjustment account that is associated with its Equity Securities portfolio at December 31, 2025. Which of the following statements is true regarding Hampton’s 2025 financial statements? (a) Hampton will report an unrealized holding gain in net income (b) The account balance will be reported as an addition to the Equity Securities account to report the securities at fair value on the balance sheet (c) Hampton will report an unrealized holding gain in comprehensive income (d) The debit balance represents the difference between the securities’ amortized cost and their fair value and is reported as an additional to the Equity Securities account on the balance sheet
In 2021, XYZ Company, a domestic corporation, recorded other income as follows:Realized foreign exchange gain, P26,337,740Dividend from PLDT, P17,213,965Foreign exchange gain resulting from offsetting of accounts, P8,445,934Gain on sale of real properties subjected to CGT, P1,000,000Gain on sale of shares of stock subjected to CGT, P250,000Gain on sale of shares of stock subjected to OPT, P100,000Reversal of prior year provision for bad debts due to over recording in prior year (not claimed as deduction in previous year), P250,000Interest income – Peso deposits – gross of 20% FWT, P5,000,000Interest income – foreign currency deposits – gross of 15% FWT, P3,500,000Interest income from deposits abroad, P1,450,000Interest income on loans to affiliates, P584,116Share in equity earnings of Mabuhay Services, Inc., a local subsidiary, P6,188,779Royalties already subjected to 20% FWT (Gross), P5,661,784Insurance proceeds on casualty losses (recovery of lost profit), P2,358,226How much is the…
The statement of financial position of a company presents following financial assets at December 31,2021:· Bank cheque account = P58,400.· Bank savings account (collectible immediately) = P23,440.· Cash = P10,000.· Common stocks of Entity Z, one of the most traded assets in Country A’s stock exchange, purchased by the airline to speculate = P2,715.· Oil Price derivative entered into by the entity to hedge the commodity price risk of the anticipated future purchase of oil for use in the entity’s operating business = P6,720.· A gold price derivative entered into by the entity to speculate = P9,880· Treasury bonds issued by the government of Country A – P8,500. The entity acquired the bonds from the government one week before entity’s reporting date. The bonds mature 2 months after the date of acquisition (ie they are two-month bonds from the date of issue).· Treasury bonds issued by the government of Country A = P6,300. The entity acquired…
Presented below is selected information related to the financial instruments of Novak Company at December 31, 2025. This is Novak Company's first year of operations. Carrying Amount Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $42,600 $43,500 Investment in Chen Company stock 737,000 856,500 Bonds payable 241,500 217,100 (a) Novak elects to use the fair value option for these investments. Assuming that Novak's net income is $108,000 in 2025 before reporting any securities gains or losses, determine Novak's net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration. Novak's net income for 2025 $ 228,400 (b) Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…
On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000
At December 31, 2021, Perth Inc. has the following investments. Assume the FVTPL investments are held for trading. Security Co. A common shares Co. B preferred shares Co. C common shares Total Investment Category FVTPL FVTPL FVTOCI Carrying Value $19,000 11,500 21,000 $51,500 Fair Value $16,000 14,000 19,000 $49,000 (a) Prepare the adjusting entries required at December 31 to reflect the above information. (b) Show the financial statement presentation (balance sheet AND statements of income and comprehensive income) of the investments and related transactions and adjustments at December 31, 2021. (Ignore income tax.) BE SPECIFIC AS TO CLASSIFICATION AND ACCOUNT TITLE. (c) Assuming that on March 20, 2022, Perth sold Co. B preferred shares for $13,000, and sold Co. A common shares for $17,500. Prepare the journal entries to record these transactions.

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