During 2012, Orly company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2012 were as follows: Security Cost Market value A 1,000 shares 600,000 700,000 В 10,000 shares 3,400,000 3,100,000 20,000 shares 6,300,000 5,900,000 The entity sold 10,000 shares of B on January 5, 2013 for P300 per share and incurred P100,000 in brokerage commission and taxes. What amount should be reported as loss on sale of equity securities?

During 2012, Orly company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2012 were as follows: Security Cost Market value A 1,000 shares 600,000 700,000 В 10,000 shares 3,400,000 3,100,000 20,000 shares 6,300,000 5,900,000 The entity sold 10,000 shares of B on January 5, 2013 for P300 per share and incurred P100,000 in brokerage commission and taxes. What amount should be reported as loss on sale of equity securities?

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...

See similar textbooks

Similar questions

The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, 2016, for 13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2016, balance sheet date, the share price declined to 11 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, 2016. b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?
Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
Victoria Company has investments in marketable securities classified as trading and available-for-sale. At the beginning of the year, the aggregate market value of each portfolio exceeded its amortized cost. During the year, Victoria sold some securities from each portfolio. At the end of the year, the aggregate amortized cost of each portfolio exceeded its market value. Victoria also has investments in bonds classified as held-to-maturity, all of which were purchased for face value. During the year, some of these bonds held by Victoria were called prior to their maturity by the bond issuer. Three months before the end of the year, additional similar bonds were purchased for face value plus 2 months accrued interest. Required: 1. Explain how Victoria accounts for: a. sale of securities from each portfolio b. each equity securities portfolio at year-end 2. Explain how Victoria accounts for the disposition prior to their maturity of the long-term bonds called by their issuer. 3. Explain how Victoria reports the purchase of the additional similar bonds at the date of the acquisition.
Lyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.
During 2021, Barto Company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2021 were as follows: Security No. of Shares Cost Market Value A 5,000 500,000 550,000 B 25,000 2,800,000 2,650,000 C 40,000 2,150,000 3,950,000 The entity sold 10,000 shares of B on January 5, 2022 for P150 per share. The market price per share of Security A and Security C is P320 and P150 respectively, as of December 31, 2022. What amount should be recognized in the Profit or Loss Statement as realized gain or loss on sale of equity securities during 2022?
During 2021, Opulence Company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2021 were: Security Cost Market value A      1,000 shares    300,000    350,000 B    10,000 shares 1,700,000 1,550,000 C    20,000 shares 3,150,000 2,950,000 The entity sold 10,000 shares of B on January 5, 2022 for P 1,450,000 What total amount should be charged to Retained Earnings as a result of the sale of equity securities in 2022?
Hatton Inc. has equity investments at fair value through profit or loss purchased during 20x4. At the end of 2014, the securities had total market value of P 525,000. As of December 31,20x5, the records show cost and market values as follows: Investment                    Cost                                         Market value         1                          P 100,000                                 P 90,000         2                          190,000                         210,000         3                          250,000                         235,000 The gain or loss that would be reported in profit or loss as a result of the valuation of the securities at the end of 20x5 is____________.
During 2017, Latvia Company purchased trading securities with the following cost and market value on December 31, 2017.             Security                                            Cost                                       Market Value             A – 1 000 shares                        200 000                                         300 000             B – 10 000 shares                   1 700 000                                    1 600 000             C – 20 000 shares                   3 100 000                                     2 900 000                                                                  5 000 000                                    4 800 000 The entity sold 10 000 shares of security B on January 15, 2018, for P 150 per share.                         1. What amount of unrealized gain or loss should be reported in income statement for 2017?                         2. What amount should be reported as loss on sale of trading investment of 2018?