Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 13, Problem 15EX
(a)
To determine
Trading securities:
These are short-term investments in debt and equity securities with an intention of trading and earning profits due to changes in market prices.
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 stock investment transactions in the books of Incorporation C.
(b)
To determine
To discuss: The reporting of trading investments on the financial statements
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Check out a sample textbook solutionChapter 13 Solutions
Financial & Managerial Accounting
Ch. 13 - Prob. 1DQCh. 13 - What causes a gain or loss on the sale of a bond...Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - What are the factors contributing to the trend...Ch. 13 - Prob. 10DQ
Ch. 13 - Prob. 1APECh. 13 - Bond investment transactions Journalize the...Ch. 13 - Prob. 2APECh. 13 - Stock investment transactions On September 12,...Ch. 13 - Prob. 3APECh. 13 - Prob. 3BPECh. 13 - Prob. 4APECh. 13 - Prob. 4BPECh. 13 - Prob. 5APECh. 13 - Prob. 5BPECh. 13 - Prob. 6APECh. 13 - Prob. 6BPECh. 13 - Prob. 1EXCh. 13 - Prob. 2EXCh. 13 - Prob. 3EXCh. 13 - Prob. 4EXCh. 13 - Prob. 5EXCh. 13 - Entries for investment in stock, receipt of...Ch. 13 - Prob. 7EXCh. 13 - Prob. 8EXCh. 13 - Entries for stock investments, dividends, and sale...Ch. 13 - Prob. 10EXCh. 13 - Prob. 11EXCh. 13 - Prob. 12EXCh. 13 - Prob. 13EXCh. 13 - Prob. 14EXCh. 13 - Prob. 15EXCh. 13 - Prob. 16EXCh. 13 - Fair value journal entries, trading investments...Ch. 13 - Prob. 18EXCh. 13 - Prob. 19EXCh. 13 - Prob. 20EXCh. 13 - Prob. 21EXCh. 13 - Prob. 22EXCh. 13 - Prob. 23EXCh. 13 - Prob. 24EXCh. 13 - Prob. 25EXCh. 13 - Prob. 26EXCh. 13 - Prob. 27EXCh. 13 - Prob. 28EXCh. 13 - Prob. 29EXCh. 13 - Debt investment transactions, available-for-sale...Ch. 13 - Prob. 2APRCh. 13 - Stock investment transactions, equity method and...Ch. 13 - Prob. 4APRCh. 13 - Prob. 1BPRCh. 13 - Prob. 2BPRCh. 13 - Stock investment transactions, equity method and...Ch. 13 - Prob. 4BPRCh. 13 - Selected transactions completed by Equinox...Ch. 13 - Benefits of fair value On July 16, 1998, Wyatt...Ch. 13 - Prob. 2CPCh. 13 - Prob. 3CPCh. 13 - Prob. 4CP
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- The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common stock purchased on September 12, 2016, for 13 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, 2016, balance sheet date, the share price declined to 11 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, 2016. b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements?arrow_forwardOBrien Industries Inc. is a book publisher. The comparative unclassified balance sheets for December 31, 2017 and 2016 follow. Selected missing balances are shown by letters. Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, 2016, are as follows: Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding shares of Jolly Roger Co. The following selected investment transactions occurred during 2017: May 5. Purchased 3,080 shares of Gozar Inc. at 30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security. Oct. 1. Purchased 40,000 of Nightline Co. 6%, 10-year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. 9. Dividends of 12,500 are received on the Jolly Roger Co. investment. Dec. 31. Jolly Roger Co. reported a total net income of 112,000 for 2017. OBrien Industries Inc. recorded equity earnings for its share of Jolly Roger Co. net income. 31. Accrued three months of interest on the Nightline bonds. 31. Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: 31. Closed the OBrien Industries Inc. net income of 146,230. OBrien Industries Inc. paid no dividends during the year. Instructions Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.arrow_forwardParilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 2016, Parilo Company sold 50,000 of the bonds for 96. Journalize entries to record the following: a. The initial acquisition of the bonds on May 1. b. The semiannual interest received on November 1. c. The sale of the bonds on November 1. d. The accrual of 1,000 interest on December 31, 2016.arrow_forward
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