Stone has provided the following information on its available-for-sale securities:
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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.An entity provided the following information at year-end: Trading Nontrading Aggregate cost P3,600,000 P5,500,000 Aggregate fair value 3,200,000 4,500,000 Aggregate lower of cost or fair value applied individually 3,040,000 4,200,000 The cost of disposal is estimated at P100,000 for trading securities and P150,000 for nontrading securities. The nontrading securities are designated as measured at FVOCI. What total amount should be reported as unrealized loss in the income statement for the current year?The Carrefour Group reported the following description of its available-for-sale investments. Assets available for sale are . . . valued at fair value. Unrealized . . . gains or losses are recorded as shareholders’ equity until they are sold. In a recent year, Carrefour’s financial statements reported €18 million in net unrealized losses (net of unrealized gains), which are included in the fair value of its available-for-sale securities reported on the balance sheet. 1. What amount of the €18 million net unrealized losses, if any, is reported in the income statement? Explain. 2. If the €18 million net unrealized losses are not reported in the income statement, in which statement are they reported, if any? Explain.
- Hatton Inc. has equity investments at fair value through profit or loss purchased during 20x4. At the end of 2014, the securities had total market value of P 525,000. As of December 31,20x5, the records show cost and market values as follows: Investment Cost Market value 1 P 100,000 P 90,000 2 190,000 210,000 3 250,000 235,000 The gain or loss that would be reported in profit or loss as a result of the valuation of the securities at the end of 20x5 is____________.On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000. At December 31, 2021, Crane Corporation had the following debt securities that were purchased during 2021, its first year of operation: Cost FairValue UnrealizedGain (Loss) Trading Securities: Security A $90000 $ 66000 $(24000) B 16000 21000 5000 Totals $106000 $87000 $(19000) Available-for-Sale Securities: Security Y $80000 $90000 $10000 Z 95000 63000 (32000) Totals $175000 $153000 $(22000) All market declines are considered temporary. Fair value adjustments at December 31, 2021 should be established with a corresponding charge against Multiple choice Income Stockholders’ Equity $19000 $ 0 $22000 $ 0 $19000 $42000 $19000 $22000
- At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, itsfirst year of operations:Cost Fair ValueTrading Securities:Security A $ 900,000 $ 910,000Security B 105,000 100,000Totals $ 1,005,000 $ 1,010,000 Securities Available-for-Sale:Security C $ 700,000 $ 780,000Security D 900,000 915,000Totals $ 1,600,000 $ 1,695,000Securities to Be Held-to-Maturity:Security E $ 490,000 $ 500,000Security F 615,000 610,000Totals $ 1,105,000 $ 1,110,000No investments were sold during 2018. All securities except Security D and Security F are considered shortterminvestments. None of the fair value changes is considered permanent.Required:Determine the following amounts at December 31, 2018.1. Investments reported as current assets2. Investments reported as noncurrent assets3. Unrealized gain (or loss) component of income before taxes4. Unrealized gain (or loss) component of accumulated other comprehensive income in shareholders’ equityFounded 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?During 2020, Boston Company purchased marketable securities as a trading investment. For the year ended December 31, 2020, the entity recognized an unrealized loss of P230,000. There were no security transactions during 2021. The entity provided the following information on December 31, 2021: Trading security = A; Cost = 2,450,000; Market Value = 2,300,000. Trading security = B; Cost = 1,800,000; Market value = 1,820,000. In the 2021 income statement, what amount should be reported as unrealized gain or loss?
- 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?At the beginning of the current year, Alexis Company purchase marketable equity securities to be held as “trading” for P5,000,000. The entity also paid transaction cost amounting to P200,000.The securities had a market value of P5,500,000 at year-ended and the transaction cost that would be incurred on the sale is estimated at P100,000. No securities were sold during the current year. Assuming the company has elected irrevocably to measure the investment at FV thru OCI. What amount of unrealized gain or loss on these securities should be reported in the income statement for the current year?Beresford Inc. purchased several investments in debt securities during 2020, 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 12/31/2020 Fair Value 12/31/2021 Amortized Cost 12/31/2020 Amortized Cost 12/31/2021 ABC Co. Bonds $ 375,000 $ 400,000 $ 367,500 $ 360,000 Trading Securities: Fair Value 12/31/2020 Fair Value 12/31/2021 Cost DEF Co. Bonds $ 48,000 $ 59,500 $ 66,000 GEH Inc. Bonds $ 47,000 $ 77,000 $ 39,000 IJK Inc. Bonds $ 44,000 $ 38,500 $ 32,900 Available-for-Sale Securities: Fair Value 12/31/2020 Fair Value 12/31/2021 Cost LMN Co. Bonds $ 130,500 $ 150,400 $ 140,000 What would be the balance in Beresford's accumulated other comprehensive income with respect to these investments in its 12/31/2021 balance sheet (ignore taxes)?
