(APPENDIX) ALLOWANCE FOR AVAILABLE-FOR-SALE SECURITIES McCarthy Corporation’s allowance to reduce available-for-sale securities to market is $7,200 on December 31 (i.e., it is a credit balance), before the lower-of-cost-or-market adjustment. The cost and market value of the available-for-sale portfolio at December 31 are $120,000 and $117,000, respectively
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(APPENDIX) ALLOWANCE FOR AVAILABLE-FOR-SALE SECURITIES
McCarthy Corporation’s allowance to reduce available-for-sale securities to market is $7,200 on December 31 (i.e., it is a credit balance), before the lower-of-cost-or-market adjustment. The cost and market value of the available-for-sale portfolio at December 31 are $120,000 and $117,000, respectively
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- On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity bonds. On that date, the carrying value of the bonds is 38,500 and the fair value is 22,980. Franz evaluation of this investment reveals that expected credit losses are 10,000. Prepare the journal entry to record the impairment.Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.ABC Co. is contemplating on investing on 12%, 3-year p1,000,000 bonds. Pricipal is due at maturity date but interest is due annually at each year-end. Market rate on January 1, 20x1 is 10%. Information regarding the fair values follows: December 31, 20x2 is 104, December 31, 20x3 is 105 Please provide entries on reclassification date under the following scenarios changes in business model in 20x2 a. Amortised cost to FVPL b. PVPL to Amortised cost c. Amortised cost to FVOCI-mandatory Requirement: Prepare jounal entries
- This problem is a variation of P12–1, modified to categorize the investment as trading securities.]Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $80 million of 8% bonds, datedJanuary 1, on January 1, 2018. Management intends to include the investment in a short-term, active tradingportfolio. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, thefair value of the bonds at December 31, 2018, was $70 million.Required:1. Prepare the journal entry to record Fuzzy Monkey’s investment on January 1, 2018.2. Prepare the journal entry by Fuzzy Monkey to record interest on June 30, 2018 (at the effective rate).3. Prepare the journal entries by Fuzzy Monkey to record interest on December 31, 2018 (at the effective rate).4. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet?…ABC Co. is contemplating on investing on 12%, 3-year p1,000,000 bonds. Pricipal is due at maturity date but interest is due annually at each year-end. Market rate on January 1, 20x1 is 10%. Information regarding the fair values follows: December 31, 20x2….104 December 31, 20x3….105 Please provide entries on reclassification date under the ff scenarios:( changes in business model in 20x2) a. Amortised cost to FVPL b. PVPL to Amortised cost c. Amortised cost to FVOCI-mandatory Required : Prepare journal entriesOn its December 31, 2020 balance sheet, Wildhorse Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2021 in the composition of Wildhorse’s portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio: Security Cost Fair value at 12/31/21 X $148000 $187000 Y 118000 103500 Z 211000 161000 $477000 $451500 The amount of unrealized loss to appear as a component of comprehensive income for the year ending December 31, 2021 is $24500. $35500. $39000. $0.
- At December 31, 2022, available-for-sale debt securities for Storrer, Inc. are as follows. The securities are considered to be a long-term investment. Security. Cost. Fair Value A $17,500 16,000 B 12,500 14,000 C 23,000 21,000 53,000 51,000 A. Prepare the adjusting entry at December 31, 2022 to report the securities at fair value. B- Show the statement presentation at December 31,2022, after adjustment to fair value. C- E. Kretsinger, a member of the board of directors, does not understand the reporting of the unreal- ized gains or losses. Write a letter to Ms. Kretsinger explaining the reporting and the purposes that it serves.Can you help me to calculate adjusted net income, adjusted net income if FV of security B were 285,000, value of held for trading securities as of 12/31/2020 and assuming these securities at measured at FVOCI, calculate the value of these financial assets as of 12/31/2020 Problem: ABC Corporation buys and sells securities expecting to earn profits on short term differences in price. during 2020, ABC Corporation purchased the following held for trading securities. Security A: Cost- 195,000; FV at 12/31/2020- 225,000 Security B: Cost- 300,000; FV at 12/31/2020- 162,000 Security C: Cost- 678,000; FV at 12/31/2020- 660,000 Before any adjustments related to these securities, ABC Corporation had net income of 900,000Marigold Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other…
- Tamarisk Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amoortization cost $52,100 Fair Value 44,200 Expected credit losses 12,850 What is the amount of the credit loss that Tamarisk should report on this available-for-sale security at December 31, 2020? Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. Assume that the fair value of the available-for-sale security is $57,200 at December 31, 2020, instead of $44,200. What is the amount of the credit loss that Tamarisk should report at December 31, 2020? Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.On January 1, 2020, Maya Company appropriately reported a credit balance of P125,000 (before income tax effect) in the fair value adjustment account in conformity with the valuation of investment to other comprehensive income. There was no change during 2020 in the composition of the portfolio of equity security Investments. Pertinent data on December 31, 2020 as follows:Securities Cost MarketC PI,500,000 PI,625,000P 1,250,000 1,300,000A 2,250,000 2,350,000Total P5,000,000 P5,275,000 What amount of unrealized gain on these securities should the company report in its 2020 shareholders' equity? a. none b. 275,000 c. 400,000 d. 625,000On January 1, 2020, Maya Company appropriately reported a credit balance of P125,000 (before income tax effect) in the fair value adjustment account in conformity with the valuation of investment to other comprehensive income. There was no change during 2020 in the composition of the portfolio of equity security Investments. Pertinent data on December 31, 2020 as follows:Securities Cost MarketC PI,500,000 PI,625,000P 1,250,000 1,300,000A 2,250,000 2,350,000Total P5,000,000 P5,275,000What amount of unrealized gain or loss on these securities should the company report in its 2020 statement of comprehensive income, ignore income tax effect? a. none b. 375,000 c. 400,000 d. 625,000