Do not give solution in image What balance sheet amount would Beresford report for the total of its investments in bonds at 12/31/2020?Multiple Choice$698,400.$683.900.None of these answer choices are correct.$690,900 Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to thesesecurities. The fluctuations in their fair values are not considered permanent.Held-to-MaturitySecurities:ABC Co. BondsTrading Securities:DEF Co. BondsGER Inc. BondsIJK Inc. BondsAvailable-for-SaleSecurities:LMN Co. BondsFair Value12/31/2020$385,000Fair Value12/31/2020$ 55,000$ 57,000$ 54,000Fair Value12/31/2020$147,400Fair Value Amortized Cost Amortized Cost12/31/2021$410,000Fair Value12/31/2021$ 66,000$ 87,000$ 48,500Fair Value12/31/2021$161,90012/31/2020$377,500Cost$ 69,100$ 49,000$ 42,900Cost$150,00012/31/2021$370,000

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What balance sheet amount would Beresford report for the total of its investments in bonds at 12/31/2020? Multiple Choice $698,400 $683.900. None of these answer choices are correct $690,900

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 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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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.
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.
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.
Victoria Company has investments in marketable securities classified as trading and available-for-sale. At the beginning of the year, the aggregate market value of each portfolio exceeded its amortized cost. During the year, Victoria sold some securities from each portfolio. At the end of the year, the aggregate amortized cost of each portfolio exceeded its market value. Victoria also has investments in bonds classified as held-to-maturity, all of which were purchased for face value. During the year, some of these bonds held by Victoria were called prior to their maturity by the bond issuer. Three months before the end of the year, additional similar bonds were purchased for face value plus 2 months accrued interest. Required: 1. Explain how Victoria accounts for: a. sale of securities from each portfolio b. each equity securities portfolio at year-end 2. Explain how Victoria accounts for the disposition prior to their maturity of the long-term bonds called by their issuer. 3. Explain how Victoria reports the purchase of the additional similar bonds at the date of the acquisition.
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 September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity bonds. On that date, the carrying value of the bonds is 38,500 and the fair value is 22,980. Franz evaluation of this investment reveals that expected credit losses are 10,000. Prepare the journal entry to record the impairment.
On January 1, 2019, Brewster Company issued 2,000 of its 5-year, 1,000 face value, 11% bonds dated January 1 at an effective annual interest rate (yield) of 9%. Brewster uses the effective interest method of amortization. On December 31, 2023, Brewster extinguished the 2,000 bonds early through acquisition in the open market for 1,980,000. On July 1, 2022, Brewster issued 5,000 of its 6-year, 1,000 face value, 10% convertible bonds dated July 1 at an effective annual interest rate (yield) of 12%. The bonds are convertible at the option of the investor into Brewsters common stock at a ratio of 10 shares of common stock for each bond. Brewster uses the effective interest method of amortization. On July 1, 2023, an investor in Brewsters convertible bonds tendered 1,500 bonds for conversion into 15,000 shares of Brewsters common stock, which had a market value of 105 per share at the date of the conversion. Required: 1. Using the information about Brewster, answer the following questions: a. Were the 11% bonds issued at par, at a discount, or at a premium? Why? b. Is the amount of interest expense for the 11% bonds using the effective interest method of amortization higher in the first or second year of the life of the bond issue? Why? 2. Using the information about Brewster, explain the following: a. How is a gain or loss on early extinguishment of debt determined? Does the early extinguishment of the 11% bonds result in a gain or loss? Why? b. How does Brewster report the early extinguishment of the 11% bonds on the 2023 income statement? 3. Based on the information provided about Brewster, answer the following questions: a. Does recording the conversion of the 10% convertible bonds into common stock under the book value method affect net income? What is the rationale for the book value method? b. Does recording the conversion of the 10% convertible bonds into common stock under the market value method affect net income? What is the rationale for the market value method?
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.
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)?
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 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
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…