AccountingUse the following information for the questionBelow is information about severalinvestments in debt securities. The companycarried no investments prior to 2020. Thefluctuations in their fair values are notconsidered permanent. No investments weresold in 2020 or 2021.DebtOriginalFair ValueFair ValueInvestments:Cost12/31/202012/31/2021Held to$370,000$375,000$400,000MaturityDebt InvTrading DebtInvestments$135,000$139,000$175,000Available-$140,000$130,000$150,000for-SaleDebt InvTotal$645,000$644,000$725,000Required: What total unrealized gain or losswould the company report in its 2021 incomestatement relative to its investments in debtsecurities?

1) Held to maturity debt investment: If the debt instrument held to maturity, it is recorded by…

Answered: Required: What total unrealized gain or…

Required: What total unrealized gain or loss would the company report in its 2021 income statement relative to its investments in debt securities?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 15E

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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.
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
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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.
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