1 Problem 12-7 (Algo) Various transactions related to equity investments: fair value through net income;financial statement effects [LO12-5]The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2024. The companybuys equity securities as noncurrent investments. None of Ornamental's investments are large enough to exert significant influence onthe investee. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2023.March 31 Acquired Distribution Transformers Corporation common stock for $470,000.September 1 Acquired $1,005,000 of American Instruments' common stock.September 30 Received a $14,100 dividend on the Distribution Transformers common stock.October 2 Sold the Distribution Transformers common stock for $502,000.November 1 Purchased $1,470,000 of M&D Corporation common stock.December 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:American Instruments common stockM&D Corporation common stock$948,000$ 1,537,000Required:1. Prepare the appropriate journal entry for each transaction or event during 2024, as well as any adjusting entries necessary atyear end.2. Indicate any amounts that Ornamental Insulation would report in its 2024 income statement, 2024 statement of comprehensiveincome, and 12/31/2024 balance sheet as a result of these investments. Include totals for net income, comprehensive income,and retained earnings as a result of these investments. Ignore income taxes.

Bonds: Issued to shareholders by a company to meet funding requirements when the company needs to…

Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2024 income statement, 2024 statement of comprehensive income, and 12/31/2024 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments. Ignore income taxes.

Required: 1. Prepare the appropriate journal entry for each transaction or event during 2024, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2024 income statement, 2024 statement of comprehensive income, and 12/31/2024 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments. Ignore income taxes.

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 17P

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33. On December 31, 2018, Calm Company appropriately reported P80, 000 unrealized loss in OIC for equity securities measured irrevocably at FVOCI. Security Cost Fair value at 12/31/19 X 1, 250, 000 1, 600, 000 Y 1, 000, 000 950, 000 Z 1, 750, 000 1, 250, 000 What amount of unrealized loss is recognized in the 2019 statement of changes in equity?
Founded on January 1, 20X1, Gehl Company had the following passive investments in equity securities at the end of 20X1 and 20X2: Equity Security Cost 12/31/X2 Fair Value A $ 96,000 $ 94,000 B 184,000 162,000 C 126,000 136,000 Required: If the company recorded a $4,000 debit to its Fair value adjustment account as its 20X2 fair value adjustment, what must have been the unrealized gain or loss reported at the end of 20X1?
22. During 2022, Haggard Company purchased marketable equity securities for P 1,850,000 to be held as trading investments. In 2022, the entity appropriately reported an unrealized loss of P 200,000 in the income statement. There was no change during 2022 in the composition of the portfolio of trading securities. Pertinent data on December 31, 2023 are: Security Cost Market value Inc (Dec) A 600,000 700,000 100,000 B 450,000 400,000 (50,000) C 800,000 900,000 100,000 Net Increase 150,000 What amount of unrealized gain on these securities should be included in the 2021 income statement?
Beresford Incorporated purchased several investments in debt securities during 2023, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Amortized Cost 12/31/2023 Amortized Cost 12/31/2024 ABC Company Bonds $ 375,000 $ 400,000 $ 367,500 $ 360,000 Trading Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Cost DEF Company Bonds $ 48,000 $ 59,500 $ 66,000 GEH Incorporated Bonds $ 47,000 $ 77,000 $ 39,000 IJK Incorporated Bonds $ 44,000 $ 38,500 $ 32,900 Available-for-Sale Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Cost LMN Company Bonds $ 130,500 $ 150,400 $ 140,000 What total unrealized holding gain would Beresford report in its 2024 income statement relative to its investments in bonds?
19.The following information relates to noncurrent investments that High Corp. placed in trust as required by the underwriter of its bonds: Bond sinking fund balance, Dec. 31, 2013 450,000 2014 additional investment 90,000 Dividends on investments 15,000 Interest revenue 30,000 Carrying amount of bonds payable 1,025,000What amount should High Corp. report in its December 31, 2014 balance sheet related to its noncurrent investment for bond sinking fund requirements? 585,000 580,000 575,000 540,000
GL1501 - Based on Problem 15-4A LO P4 Twist Corp. had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017. Apr. 16 Purchased 5,000 shares of Lafayette Co. stock at $26 per share. July 7 Purchased 3,500 shares of CVF Co. stock at $51 per share. 20 Purchased 1,600 shares of Green Co. stock at $18 per share. Aug. 15 Received an $1.20 per share cash dividend on the Lafayette Co. stock. 28 Sold 3,000 shares of Lafayette Co. stock at $29 per share. Oct. 1 Received a $3.30 per share cash dividend on the CVF Co. shares. Dec. 15 Received a $1.40 per share cash dividend on the remaining Lafayette Co. shares. 31 Received a $2.70 per share cash dividend on the CVF Co. shares.
Kingbird Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,210,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $1,060,000; the debt investment securities of FourSquare are valued at $2,330,000 and are considered impaired. Prepare the journal entry to record the impairment of the debt securities at December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and…
Kingbird Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,430,000 Investment in debt securities of FourSquare Company $3,210,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Kingbird’s stock investments does not result in significant influence on the operations of Laser Company. Kingbird’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued at $1,060,000; the debt investment securities of FourSquare are valued at $2,330,000 and are considered impaired. Prepare the journal entry to record the impairment of the debt securities at December 31, 2021. Assume that the debt investment in FourSquare Company was available-for-sale and the expected credit loss was $980,000. Prepare the journal entry to record this impairment on December 31, 2021.
Paul Company presented the following information pertaining to its investments in equity securities. FVPL FVOCICost P1,000,000 P1,000,000Market value December 31, 2020 1,050,000 980,000 December 31, 2019 950,000 920,000 2.What amount should Paul report as unrealized gains/losses in the shareholders' equity of its December 31, 2020 statement of financial position?
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SOFIA had investments in equity securities costing P1,000,000 that were classifies as investment in fair value thru other comprehensive income. On june 30, 2021, SOFIA decided to reclassify the investment as investment in fair value thru profit and loss. the investments' fair value was P985,000 at december 31, 2020 and P950,000 at june 30, 2021, and P1,500,000 at december 31, 2021 What amount of loss/gain from investments should Sofia report in 2021 income statement? Using the information above, what is the audited net unrealized loss/gain on marketable equity securities in its 2021 statement of shareholders’ equity?
23. The following information pertains to Long Inc.'s investment in marketable debt securities: A marketable available-for-sale debt security costing $40,000, written down to $25,000 in Year 4, had a $30,000 fair value on December 31, Year 5. On December 31, Year 5, Long reclassified a debt security with a $100,000 carrying cost and a $90,000 fair value from the trading category to the available-for-sale category. All changes in the value of the available-for-sale securities are noncredit related and considered temporary. What is the net effect of the above items on Long's available-for-sale debt securities valuation allowance for unrealized losses as of December 31, Year 5? A. No effect. B. $5,000 decrease. C. $10,000 decrease. D. $15,000 decrease