Flounder Corporation, a clothing retailer, had income from operations (before tax) of $367,000, and recorded the following before-tax gains/losses) for the year ended December 31, 2023: Gain on disposal of equipment Unrealized (loss/gain on FV-NI investments (Loss)/gain on disposal of building Gain on disposal of FV-Nt investments 352.500 (25,380) (50,760) 63,920 Flounder also had the following account balances as at January 1, 2023 Retained earnings Accumulated other comprehensive income (this was due to a revaluation surplus on land) Accumulated other comprehensive income (this was due to gains on FV-OCI debt investments) $31,020 61.040 385,400 As at January 1, 2023, Flounder had one piece of land that had an original cost of $142,000 that it accounted for using the revaluation model. It was most recently revalued to fair value on December 31, 2022, when its carrying amount was adjusted to fair value of $203.040. In January 2023, the piece of land was sold for proceeds of $203,040. In applying the revaluation model, Flounder maintains the balance in the Revaluation Surplus (OCD) account until the asset is retired or disposed of In 2018. Flounder purchased a portfolio of debt investments that the company intended to hold for the longer term and it classified the portfolio of investments as FV-OCI with gains/losses recycled through net income. The investments in the portfolio are traded in an active market. Flounder records unrealtred gains and losses on these investments as OCI, and then books these gains and losses to net income when they are impaired or sold. The portfollo's carrying amount on December 31, 2022. was $103.400. The entire portfolio was sold in November 2023 for proceeds of $118.440
Flounder Corporation, a clothing retailer, had income from operations (before tax) of $367,000, and recorded the following before-tax gains/losses) for the year ended December 31, 2023: Gain on disposal of equipment Unrealized (loss/gain on FV-NI investments (Loss)/gain on disposal of building Gain on disposal of FV-Nt investments 352.500 (25,380) (50,760) 63,920 Flounder also had the following account balances as at January 1, 2023 Retained earnings Accumulated other comprehensive income (this was due to a revaluation surplus on land) Accumulated other comprehensive income (this was due to gains on FV-OCI debt investments) $31,020 61.040 385,400 As at January 1, 2023, Flounder had one piece of land that had an original cost of $142,000 that it accounted for using the revaluation model. It was most recently revalued to fair value on December 31, 2022, when its carrying amount was adjusted to fair value of $203.040. In January 2023, the piece of land was sold for proceeds of $203,040. In applying the revaluation model, Flounder maintains the balance in the Revaluation Surplus (OCD) account until the asset is retired or disposed of In 2018. Flounder purchased a portfolio of debt investments that the company intended to hold for the longer term and it classified the portfolio of investments as FV-OCI with gains/losses recycled through net income. The investments in the portfolio are traded in an active market. Flounder records unrealtred gains and losses on these investments as OCI, and then books these gains and losses to net income when they are impaired or sold. The portfollo's carrying amount on December 31, 2022. was $103.400. The entire portfolio was sold in November 2023 for proceeds of $118.440
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 38P
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