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Intermediate Accounting: Reporting and Analysis, 2017 Update
2nd Edition
ISBN: 9781337116619
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 7P
Trading Securities 8th State Bank prepares interim financial statements and follows an investment strategy of investing in trading securities. At the beginning of the third quarter of 2016, the bank held the following portfolio of trading securities:
During the third quarter of 2016, the bank entered into the following trading securities transactions:
On September 30, 2016, the Porter Company common stock had a quoted market price of $36.50 per share and the Union Company common stock had a quoted market price of $21 per share.
Required:
- 1. Prepare
journal entries to record the preceding information. - 2. Show what the bank reports on its third quarter 2016 income statement for these trading securities.
- 3. Show how the bank reports these trading securities on its September 30, 2016,
balance sheet .
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Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. Assume that these transactions occur in 2016 (before the new rules for securities went into effect).a. Loudder Inc. purchases 5,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%.b. Loudder receives semi-annual cash interest of $200,000.c. Year-end fair value of the bonds is $978 per bond.d. Shortly after year-end, Loudder sells all 5,000 bonds for $970 per bond.Use negative signs with answers, if appropriate.
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PROBLEM E:
You were engaged by SKT Company for the first time on February 15, 2018, to audit their financial statements
as of and for the year ended December 31, 2017. In auditing their investment accounts, you decided to review
the transactions and entries related to an investment in debt securities.
On January 2, 2016, SKT acquired a 5-year 10% bond with a face value of P5,000,000 for P4,800,000. The entity
incurred direct costs for P15,500, resulting to a yield rate of 11%. The business model of the entity for investing
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Chapter 13 Solutions
Intermediate Accounting: Reporting and Analysis, 2017 Update
Ch. 13 - Prob. 1GICh. 13 - Provide brief definitions for the following terms:...Ch. 13 - Prob. 3GICh. 13 - Prob. 4GICh. 13 - Prob. 5GICh. 13 - Briefly summarize the accounting for an investment...Ch. 13 - Prob. 7GICh. 13 - Prob. 8GICh. 13 - Prob. 9GICh. 13 - Prob. 10GI
Ch. 13 - Prob. 11GICh. 13 - Prob. 12GICh. 13 - Prob. 13GICh. 13 - Prob. 14GICh. 13 - Briefly describe how to determine and record the...Ch. 13 - Prob. 16GICh. 13 - Prob. 17GICh. 13 - Prob. 18GICh. 13 - Prob. 19GICh. 13 - How does IFRS categorize minority passive...Ch. 13 - Prob. 21GICh. 13 - Prob. 22GICh. 13 - Prob. 23GICh. 13 - Prob. 24GICh. 13 - Prob. 25GICh. 13 - Prob. 26GICh. 13 - Prob. 27GICh. 13 - What is a fund? Distinguish between a fund and an...Ch. 13 - Prob. 29GICh. 13 - Prob. 30GICh. 13 - On January 1, 2016, Weaver Company purchased as...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - A security in a portfolio of available-for-sale...Ch. 13 - Prob. 8MCCh. 13 - Cash dividends declared out of current earnings...Ch. 13 - Prob. 10MCCh. 13 - Prob. 1RECh. 13 - Prob. 2RECh. 13 - Prob. 3RECh. 13 - Prob. 4RECh. 13 - Prob. 5RECh. 13 - Prob. 6RECh. 13 - Prob. 7RECh. 13 - Prob. 8RECh. 13 - Prob. 9RECh. 13 - Prob. 10RECh. 13 - Prob. 11RECh. 13 - Prob. 12RECh. 13 - Prob. 13RECh. 13 - On January 1, Kilgore Inc. accepts a 20,000...Ch. 13 - Prob. 15RECh. 13 - Prob. 16RECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 19ECh. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Prob. 22ECh. 13 - Prob. 23ECh. 13 - Prob. 24ECh. 13 - Prob. 25ECh. 13 - Prob. 26ECh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Trading Securities 8th State Bank prepares interim...Ch. 13 - Available-for-Sale Securities Holly Company...Ch. 13 - Investments in Equity Securities Noonan...Ch. 13 - Available-for-Sale Investments Manson Incorporated...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 1CCh. 13 - Investments in Securities Cane Company has two...Ch. 13 - Prob. 3CCh. 13 - Prob. 4CCh. 13 - Available-for-Sale Securities The following are...Ch. 13 - Prob. 6CCh. 13 - Prob. 7CCh. 13 - Prob. 8CCh. 13 - Prob. 9CCh. 13 - Prob. 10C
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