On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income

On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

See similar textbooks

Similar questions

During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Hamilton Companys balance sheet on January 1, 2019, was as follows: Korbel Company is considering purchasing Hamilton (a privately held company) and discovers the following about Hamilton: a. No allowance for doubtful accounts has been established. A 10,000 allowance is considered appropriate. b. Marketable securities are valued at cost. The current market value is 60,000. c. The LIFO inventory method is used. The FIFO inventory of 140,000 would be used if the company is acquired. d. Land, included in property, plant, and equipment, which is recorded at its cost of 50,000, is worth 120,000. The remaining property, plant, and equipment is worth 10% more than its depreciated cost. e. The company has an unrecorded trademark that is worth 70,000. f. The companys bonds are currently trading for 130,000. g. The pension liability is understated by 40,000. Required: 1. Compute the amount of goodwill if Korbel agrees to pay 500,000 cash for Hamilton. 2. Next Level What are the reasons that the book value of Hamiltons net identifiable assets differ from their market value? 3. Prepare the journal entry to record the acquisition on the books of Korbel assuming Hamilton is liquidated. 4. If Korbel agrees to pay only 400,000 cash, how much goodwill exists? 5. If Korbel pays only 400,000 cash, prepare the journal entry to record the acquisition on its books, assuming Hamilton is liquidated.
LO.4, 7 In December 2019, Carl Corporation sold land it held as an investment. The corporation received 50,000 in 2019 and a note payable (with adequate interest) for 150,000 to be paid in 2021. Carl Corporations cost of the land was 80,000. The corporation has a 90,000 net capital loss carryover that will expire in 2019. Should Carl Corporation report the sale in 2019 or use the installment method to report the income as payments are received?
Gray, Inc., a C corporation, has taxable income from operations of 1,452,000 for 2019. It also has a net long-term capital loss of 355,000 from the sale of a subsidiarys stock. The year 2019 is the first year in the last 10 years that Gray has not had at least 500,000 per year of net long-term capital gains. What is Grays 2019 taxable income? What, if anything, can it do with any unused capital losses?
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.
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
Mills Company had five 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 convertible security is described in the following table. The 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 the securities would be included in the diluted earnings per share computations.
On January 1, 2020, the Soondubu Stew Corporation purchased equity securities to be held for trading purposes for P2,000,000. The company also paid commissions, taxes and other transaction costs amounting to P50,000. The securities had fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 profit or loss section of the statement of comprehensive income?Required to answer. Single choice. -P100,000 -P350,000 -(P250,000) -(P200,000)
On January 1, 2020, the Stew Corporation purchased equity securities to be held for trading purposes for $2,000,000. The company also paid commissions, taxes and other transaction costs amounting to $50,000. The securities had fair values at December 31, 2020 and 2021, respectively: $1,750,000 and $2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 profit or loss section of the statement of comprehensive income?
On January 1, 2020, the Gim Corporation purchased equity securities for P2,000,000. The company also paid commissions, taxes and other transaction costs amounting to P50,000. Because the securities were not acquired for immediate trading, Gim exercised the option to take the change in fair value through other comprehensive income. The securities had fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 statement of financial position? a. P250,000 cumulative unrealized loss b. P100,000 cumulative unrealized gain c. P200,000 cumulative unrealized loss d. P50,000 cumulative unrealized gain
On January 1, 2020, the Gim Corporation purchased equity securities for P2,000,000. The company also paid commissions, taxes and other transaction costs amounting to P50,000. Because the securities were not acquired for immediate trading, Gim exercised the option to take the change in fair value through other comprehensive income. The securities had fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 statement of financial position?Required to answer. Single choice.
On January 1, 2020, the Pacita Corporation purchased equity securities for P2,000,000. The company also paid commission, taxes and other transaction costs amounting to P50,000. Because the securities were acquired not for immediate trading, Pacita exercised its option to measure the change in fair value through other comprehensive income. The securities had the following market values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020 and 2021. What amount of unrealized gain or loss should be reported in December 31, 2021 statement of financial position as a component of shareholders’ equity?