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- Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.Refer to the information in RE13-11. Assume that on December 31, 2019, the investment in Cornett Company stock has a market value of 10,500. Prepare the year-end journal entry to record the unrealized gain or loss.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
- On January 1,2021 Hubalde Company purchased training equity investments which are irrevocably designated at FVPL: 1. Determine the unrealized gain/loss on december 31,2021? 2. Determine the net gain/loss reported on the income statement on december 31,2021? 3. What are the related journal entries? 4. Assuming, the entity irrevocably designated it ay FVOCI, How much is the unrealized gain/loss- FVOCI on December 31,2021? 5. Assuming, the entity irrevocably designated it ay FVOCI, How much is the unrealized gain/loss reported on the income statement on December 31,2021? 6. Assuming the entity irrevocably designated it at FVOCI, What are the related journal entries?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.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, 2025, Sandhill Inc. had the following balance sheet. Sandhill Inc. Balance Sheet As of January 1, 2025 Assets Equity Cash $54,200 Common stock $260,800 Debt investments (available-for-sale) Total 220,700 Accumulated other comprehensive income 14,100 $274,900 Total $274,900 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Sandhill Inc.'s available-for-sale debt securities at December 31, 2025, was $185,300; its cost was $127,000. No securities were purchased during the year. Sandhill Inc's income statement for 2025 was as follows. (Ignore income taxes.) Sandhill Inc. Income Statement As of January 1, 2025 Dividend revenue $5,300 Gain on sale of investments 27,300 Net income $32,600 Prepare the journal entry to record the sale of the available-for-sale debt securities in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is…During 2021, Lavida Loca Company purchased trading securities with the following cost and market value on December 31, 2021. Cost Market value A 300,000 400,000 B 1,500,000 1,700,000 C 3,800,000 3,900,000 The entity sold Investment C on January 10, 2022 for P 4,000,000 What is the unrealized gain or loss should be reported in the income statement for 2021? a. 100,000 gain b, 100,000 loss c. 400,000 gain d. 400,000 lossPresented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company’s first year of operations. CarryingAmount Fair Value(at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn’s net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn’s net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn’s net income for 2020 $ (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.…
- On January 1, 2016, an entity purchased marketable equity securities not qualifying as financial asset held for trading. The entity elected to present changes in fair vake as component of other comprehensive income. On December 31, 2016, the securities have the following cost and market value: Cost Market Security A 1,000,000 1,100,000 Security B 2,000,000 2,700,000 Security C 3,000,000 2,800,000 6,000,000 6,600,000 1. What is the entry to record the unrealized gain or loss? 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000…On January 1, 2020, Acker Inc. had the following balance sheet. Acker Inc.Balance SheetAs of January 1, 2020 Assets Equity Cash $ 50,000 Common stock $260,000 Debt investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000 Total $290,000 Total $290,000 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.'s available-for-sale debt securities at December 31, 2020, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.'s income statement for 2020 was as follows. (Ignore income taxes.) Acker Inc.Income StatementFor the Year Ended December 31, 2020 Dividend revenue $ 5,000 Gain on sale of investments 30,000 Net income $35,000 Instructions (Assume all transactions during the year were for cash.) d. Prepare a balance sheet as of December 31, 2020A Company had various equity investments at fair value through profit or loss transactions during 2019 and 2020. The acquisition cost of all the securities in its portfolio during 2019 was P532,000. At December 31, 2019 and December 31, 2020, the market value of these equity investments were P541,000 and P512,000, respectively. In 2021, all of these securities were sold for P550,000. Assuming that the securities held by A Company are classified as at fair value through other comprehensive income, what is the gain on sale reported in A Company's 2020 Income statement? a. P38,000 b. P18,000 c. P9,000 d. P0
