(1) Equity investment : Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company. Fair value through net income method : This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

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Answer 1

Question

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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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? a.280,000 b.200,000 c.120,000 d.0

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Answer 2

Question

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 3

Question

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 4

Question

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Answer 5

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 6

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

Answer 7

Chapter 12, Problem 12.17E

To determine

(1)

Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.

Fair value through net income method: This is the accounting method used for accounting stock or equity investments which claim less than 20% of the outstanding stock of the investee company.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,175,000, and the cost of shares was $1,345,000

Answer 8

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

Answer 9

To determine

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

Answer 10

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 11

To determine

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

Solution Summary: The author explains that equity investments claim ownership in the investee company and pay dividend revenue to the investor company. Journal entry is a set of economic events which can be measured in monetary terms.

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Chapter 12 Solutions

Solution Summary: The author explains that equity investments claim ownership in the investee company and pay dividend revenue to the investor company. Journal entry is a set of economic events which can be measured in monetary terms.

(2) To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3) To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000

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Chapter 12 Solutions

(2)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,275,000, and the cost of shares was $1,345,000

(3)

To journalize: The adjusting entry as at December 31, 2018, if the fair value adjustment was $145,000, fair value of shares was $1,375,000, and the cost of shares was $1,345,000