Principles of Financial Accounting.
22nd Edition
ISBN: 9780077632892
Author: John J. Wild
Publisher: McGraw Hill
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Chapter 15, Problem 2MCQ
To determine
Identify the manner in which company A records the stock investment at the end of the accounting period.
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Star Company has outstanding a P6,000,000 note payable to an investment entity. Accrued interest payable on this note amounted to P600,000. Because of financial difficulties, the entity negotiated with the investment entity to exchange inventory of machine art to satisfy the debt. The inventory transferred is carried of P3,600,000. The estimated retail value of the inventory is P5,600,000. The perpetual inventory system is used. What amount of pretax gain on extinguishment should Star Company report as component of income from continuing operations in 2017?
Joshua Company has outstanding a P8,000,000 note payable to an investment entity. Accrued interest payable on this note amounted to P800,000. Because of financial difficulties, Joshua Company negotiated with the investment entity to exchange inventory of machine parts to satisfy the debt. The inventory transferred is carried at P5,000,000. The estimated retail value of the inventory is P7,000,000. Joshua Company uses the perpetual inventory system. What is the gain or loss on debt extinguishment? Indicate gain or loss. Follow exact answer format: Example 1,500,000 GAIN or 1,500,000 LOSS 3,800,000 x[3,800,000 GAIN]
Carpark Services began operations in 20X1 and maintains investments in available-for-sale debt securities. The year-end cost
and fair values for its portfolio of these debt securities follows.
Available-for-Sale Securities
Fair Value
$ 323,800
December 31, 20x1
December 31, 20x2
$ 411,600
The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X1 is:
Cost
$ 320,000
$ 396,000
A
Chapter 15 Solutions
Principles of Financial Accounting.
Ch. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Under what conditions should investments be...
Ch. 15 - Prob. 6DQCh. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQCh. 15 - Prob. 11DQCh. 15 - Prob. 12DQCh. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - Prob. 15DQCh. 15 - Prob. 16DQCh. 15 - Prob. 17DQCh. 15 - Prob. 1QSCh. 15 - Prob. 2QSCh. 15 - Prob. 3QSCh. 15 - Prob. 4QSCh. 15 - Prob. 5QSCh. 15 - Prob. 6QSCh. 15 - Prob. 7QSCh. 15 - Prob. 8QSCh. 15 - Prob. 9QSCh. 15 - Prob. 10QSCh. 15 - Prob. 11QSCh. 15 - Prob. 12QSCh. 15 - Prob. 13QSCh. 15 - Prob. 14QSCh. 15 - Prob. 15QSCh. 15 - Prob. 16QSCh. 15 - Prob. 17QSCh. 15 - Prob. 18QSCh. 15 - Prob. 1ECh. 15 - Prob. 2ECh. 15 - Prob. 3ECh. 15 - Prob. 4ECh. 15 - Prob. 5ECh. 15 - Prob. 6ECh. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Prob. 9ECh. 15 - Prob. 10ECh. 15 - Prob. 11ECh. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - Prob. 14ECh. 15 - Prob. 15ECh. 15 - Prob. 16ECh. 15 - Prob. 17ECh. 15 - Prob. 1APCh. 15 - Prob. 2APCh. 15 - Prob. 3APCh. 15 - Prob. 4APCh. 15 - Prob. 5APCh. 15 - Prob. 6APCh. 15 - Prob. 1BPCh. 15 - Prob. 2BPCh. 15 - Prob. 3BPCh. 15 - Prob. 4BPCh. 15 - Prob. 5BPCh. 15 - Prob. 6BPCh. 15 - Prob. 15SPCh. 15 - Prob. 1BTNCh. 15 - Prob. 2BTNCh. 15 - Prob. 3BTNCh. 15 - Prob. 4BTNCh. 15 - Prob. 5BTNCh. 15 - Prob. 7BTNCh. 15 - Prob. 8BTNCh. 15 - Prob. 9BTN
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