Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no equity securities. During December of 2019, it entered into the following transactions: Dec. 10 Purchased 500 shares of Carroll Company common stock for $76 per share. Dec. 21 Purchased 700 shares of Dynamo Company common stock for $35 per share. At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $34 per share. Required: 1. Prepare journal entries to record the preceding information. 2. What is the unrealized holding gain or loss, and where is it reported in the 2019 financial statements? 3. Show how the bank reports the equity securities on its December 31, 2019, balance sheet.
Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no equity securities. During December of 2019, it entered into the following transactions: Dec. 10 Purchased 500 shares of Carroll Company common stock for $76 per share. Dec. 21 Purchased 700 shares of Dynamo Company common stock for $35 per share. At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $34 per share. Required: 1. Prepare journal entries to record the preceding information. 2. What is the unrealized holding gain or loss, and where is it reported in the 2019 financial statements? 3. Show how the bank reports the equity securities on its December 31, 2019, balance sheet.
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 9P
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Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no equity securities. During December of 2019, it entered into the following transactions:
| Dec. 10 | Purchased 500 shares of Carroll Company common stock for $76 per share. |
| Dec. 21 | Purchased 700 shares of Dynamo Company common stock for $35 per share. |
At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $34 per share.
Required:
| 1. | Prepare |
| 2. | What is the unrealized holding gain or loss, and where is it reported in the 2019 financial statements? |
| 3. | Show how the bank reports the equity securities on its December 31, 2019, balance sheet. |
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