The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $693,000. The fair value of the securities on December 31, 20Y7, is $924,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 20Y7 Dec. 31 b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant). Unrealized losses would be in determining net income, while unrealized gains would be in determining net income.. c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements? The unrealized gain on available-for-sale investments would be reported as The debit balance of Valuation Allowance for Available-for-Sale Investments would be to the balance of the investments account of $693,000 to report the fair value of $924,000 on the

The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $693,000. The fair value of the securities on December 31, 20Y7, is $924,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 20Y7 Dec. 31 b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant). Unrealized losses would be in determining net income, while unrealized gains would be in determining net income.. c. If the Raiders Inc. securities had been classified as available-for-sale securities, how would the investment be reported on the financial statements? The unrealized gain on available-for-sale investments would be reported as The debit balance of Valuation Allowance for Available-for-Sale Investments would be to the balance of the investments account of $693,000 to report the fair value of $924,000 on the

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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Journal entries for trading investments The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 fill in the blank 3edf1609201706b_2 fill in the blank 3edf1609201706b_3 fill in the blank 3edf1609201706b_5 fill in the blank 3edf1609201706b_6 20Y7 Dec. 31 fill in the blank 3edf1609201706b_8 fill in the blank 3edf1609201706b_9 fill in the blank 3edf1609201706b_11 fill in the blank 3edf1609201706b_12 b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the (or a separate item if significant).…
Journal entries for trading investments The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $551,000. The fair value of the securities on December 31, 20Y7, is $609,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 fill in the blank fill in the blank fill in the blank fill in the blank 20Y7 Dec. 31 fill in the blank fill in the blank fill in the blank fill in the blank b. How is a unrealized gain or loss for trading investments reported on the financial statements? The unrealized gain or unrealized loss on trading investments is reported on the_____________(or a separate item if significant). Unrealized losses would be_____________in determining net income, while unrealized gains would be_____________in determining net income..…
Journal entries for trading investments The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February 24, 20Y7, for $216,000. The fair value of the securities on December 31, 20Y7, is $288,000. a. Journalize the entries for the February 24 purchase and the adjustment to fair value on December 31, 20Y7. If an amount box does not require an entry, leave it blank. 20Y7 Feb. 24 Accounting numeric field 20Y7 Dec. 31 Feedback Check My Work a. Increase the investment and reduce Cash for number of shares times the per share price. The unrealized gain (credit) or unrealized loss (debit) is the difference between the acquired per share price and the market price per share at 20Y7 taken times the number of shares acquired. The offset account for the gain or loss entry is the valuation allowance account. b. How is a unrealized gain or loss for trading investments reported on the financial statements? 00
Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Portfolio of Available-for-Sale Securities December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 View transaction list View journal entry worksheet Prepare journal entries to record each year-end fair value adjustment for these securities. No 3 Cost $11,000 18,900 20,600 14,800 Date Dec. 31, Year 3 No Transaction Recorded Fair Value $17,500 28,000 30, 200 19,700 General Journal Debit Credit Ⓒ
Trading Investments purchased for $10 were compared with the fair value of $12 at the end of the year. The journal entry to adjust the investments would include a: Group of answer choices credit to Unrealized Loss on Trading Investments $2. credit to Unrealized Gain on Trading Investments $2. debit to Unrealized Loss on Trading Investments $2. debit to Unrealized Gain on Trading Investments $2.
Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Portfolio of Available-for-Sale Securities December 31, Year 1 December 31, Year 2 Cost $ 13,000 20,000 23,000 16,500 December 31, Year 3 December 31, Year 4 Complete this question by entering your answers in the tabs below. Prepare journal entries to record each year-end fair value adjustment for these securities. Adjustment General Journal Calculation Calculation adjustment required to fair value adjustment. 12/31/Year 1 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 2 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 3 Existing balance in Fair Value…
Trading Investments purchased for $10 were compared with the fair value of $8 at the end of the year. The journal entry to adjust the investments would include a: Group of answer choices credit to Valuation Allowance for Trading Investments $2. debit to Valuation Allowance for Trading Investments $2. credit to Unrealized Gain on Trading Investments $2. debit to Unrealized Gain on Trading Investments $2.
Fair value adjustment for trading investments During the year ended December 31, 20Y3, trading securities were purchased for $346,000. On December 31, 20Y3, the securities had a fair value of $309,000. Journalize the December 31, 20Y3, adjusting entry to record the unrealized gain or loss on trading investments purchased in 20Y3. If an amount box does not require an entry, leave it blank. 20Y3 Dec. 31
On January 1, 20Y3, Valuation Allowance for Trading Investments had a zero balance. On December 31, 20Y3, the cost of the trading securities portfolio was $346,000, and the fair value was $309,000. Required: Journalize the December 31, 20Y3, adjusting entry to record the unrealized gain or loss on trading investments. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 161 Trading Investments 162 Available-for-Sale Investments 165 Valuation Allowance for Trading Investments 166 Valuation…
Action Company sells bond investments classified as trading securities for $99,000. The face amount is $100,000; unamortized discount is $2,000. What must be included in the journal entry to record the sale?
Valuing Available-for-Sale Securities at Fair Value On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $216,000, and the fair value was $221,900. Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31.
Instructions Stuart Corp. purchased $80,000 of Durmb Co, bonds and $120,000 of Silly Inc. bonds. Both investments are classified as trading. As of December 31, the Dumb Co. bonds are selling for $90,000 and the Silly Inc, bonds are selling for $140,000 per share. Stuart had net income of $150,000 before reporting the impact of investment transactions. Required: a. Record the December 31 adjusting entries for investments. b. What is Stuart Corp.'s net income after adjusting for investments? c. What is the appropriate balance sheet presentation for these investments?