The net amount to be recognized in 2021 comprehensive income is 500,000 unrealized loss200,000 unrealized loss300,000 unrealized loss100,000 unrealized loss The net amount to be recognized in 2022 comprehensive income is 240,000 unrealized gain260,000 unrealized loss60,000 unrealized loss200,000 unrealized gain The net unrealized gain/loss at December 31, 2022 in accumulated other comprehensive income in shareholders' equity is 100,000 unrealized loss200,000 unrealized gain40,000 unrealized gain260,000 unrealized loss Pompey Inc. carries the following marketable equity securities on its books at December 31, 2021 and 2022. All securitieswere purchased during 2021.Trading Securities:Fair value 12/31/21P 260,000Fair value 12/31/22P 400,000CostAAA CompanyP 500,000BBB Company260,000700,000P1,460,000400,000400,000CcC CompanyTotal600.000500.000P1,260.000P1,300,000Financial Assets at Fair value through OCICostFair value 12/31/21Fair value 12/31/22DDD CompanyP4,100,000P3,600,000P3,600,0001.400.000P5,000,000EEE Company1.000.000P5,100,0001.200.000TotalP4,800.000

Trading securities will not be considered for fair value through oci.

Pompey Inc. carries the following marketable equity securities on its books at December 31, 2021 and 2022. All securities were purchased during 2021. Trading Securities: Fair value 12/31/21 P 260,000 Fair value 12/31/22 P 400,000 Cost AAA Company P 500,000 ввB Сompany ccc Company 260,000 400,000 400,000 500,000 P1,300,000 700.000 600.000 Total P1.460,000 P1,260.000 Financial Assets at Fair value through OCI Cost Fair value 12/31/21 P3,600,000 Fair value 12/31/22 DDD Company EEE Company P4,100,000 P3,600,000 1.000,000 1.200.000 1.400.000 Total P5.100.000 P4.800.000 P5.000.000

Pompey Inc. carries the following marketable equity securities on its books at December 31, 2021 and 2022. All securities were purchased during 2021. Trading Securities: Fair value 12/31/21 P 260,000 Fair value 12/31/22 P 400,000 Cost AAA Company P 500,000 ввB Сompany ccc Company 260,000 400,000 400,000 500,000 P1,300,000 700.000 600.000 Total P1.460,000 P1,260.000 Financial Assets at Fair value through OCI Cost Fair value 12/31/21 P3,600,000 Fair value 12/31/22 DDD Company EEE Company P4,100,000 P3,600,000 1.000,000 1.200.000 1.400.000 Total P5.100.000 P4.800.000 P5.000.000

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 6RE: Refer to the information in RE13-5. Assume that on June 30, Aggie received interest on the Smith...

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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.
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.
Trading Securities Pear Investments began operations in 2020 and invests in securities classified as trading securities. During 2020, it entered into the following trading security transactions: Purchased 20,000 shares of ABC common stock at $38 per share Purchased 32,000 shares of XYZ common stock at $17 per share At December 31, 2020, ABC common stock was trading at $39.50 per share and XYZ common stock was trading at $16.50 per share. Required: 1. Prepare the necessary adjusting entry to value the trading securities at fair market value. 2. CONCEPTUAL CONNECTION What is the income statement effect of this adjusting entry?
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.
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.
Refer to the information in RE13-5. Assume that on June 30, Aggie received interest on the Smith Corporation bonds. Prepare the June 30 journal entries to record the receipt of the interest. On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-years bonds with a face value of 12,000 at par plus four months of accrued interest. Prepare the April 30 journal entry to record the purchase of these available-for-sale securities.
On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
Convertible Preferred Stock On January 2, 2019, Bray Corporation issues 900 shares of 100 par convertible preferred stock for 117 per share. On January 7, 2020, all the preferred shareholders convert their shares to common stock. Required: 1. Prepare the January 2, 2019, journal entry to record the issuance of the preferred stock. 2. Prepare the January 7, 2020, journal entry to record the conversion, assuming the preferred stock contract states that: a. each share of preferred stock is convertible into 7 shares of 10 par common stock b. each share of preferred stock is convertible into 12 shares of 10 par common stock
Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.