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a) On May 31st,2020, Ford company purchased a long-term investment related to Motro Company for $12 million as trading securities, of 8% quoted bonds. On the same date the business acquired $15 million of Cora Company shares as available-for sale security and purchased Treasury bonds for $3 million, from Samsuc Company hoping to generate profit in short period of time.          b)  On November 15th, 2020, Ford company sold the Samsuc Treasury             bonds for $4 million.   c) On December 31st, 2020, record the necessary adjusting entry(s) and closing entries related to the investments. The market prices of the investments are:  Motro Company       $11.5 million Cora Company          $16 million  Samsuc Company     $5 million    Required:  Record the necessary adjusting entries. Indicate any amounts that Ford would report in its 2020 statement of financial position and income statement as result of these investments.

a) On May 31st,2020, Ford company purchased a long-term investment related to Motro Company for $12 million as trading securities, of 8% quoted bonds. On the same date the business acquired $15 million of Cora Company shares as available-for sale security and purchased Treasury bonds for $3 million, from Samsuc Company hoping to generate profit in short period of time.          b)  On November 15th, 2020, Ford company sold the Samsuc Treasury             bonds for $4 million.   c) On December 31st, 2020, record the necessary adjusting entry(s) and closing entries related to the investments. The market prices of the investments are:  Motro Company       $11.5 million Cora Company          $16 million  Samsuc Company     $5 million    Required:  Record the necessary adjusting entries. Indicate any amounts that Ford would report in its 2020 statement of financial position and income statement as result of these investments.

Intermediate Accounting: Reporting And Analysis
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 3C
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a) On May 31st,2020, Ford company purchased a long-term investment related to Motro Company for $12 million as trading securities, of 8% quoted bonds. On the same date the business acquired $15 million of Cora Company shares as available-for sale security and purchased Treasury bonds for $3 million, from Samsuc Company hoping to generate profit in short period of time.   

 

    b)  On November 15th, 2020, Ford company sold the Samsuc Treasury             bonds for $4 million.

 

c) On December 31st, 2020, record the necessary adjusting entry(s) and closing entries related to the investments. The market prices of the investments are: 

Motro Company       $11.5 million

Cora Company          $16 million 

Samsuc Company     $5 million 

 

Required: 

  1. Record the necessary adjusting entries.
  2. Indicate any amounts that Ford would report in its 2020 statement of financial position and income statement as result of these investments. 
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