LED Corporation owns 100,000 shares of Branch Pharmaceuticals common stock and classifies its investment as securities available-for-sale. The market price of Branch's stock fell more than 30%, by $4.50 per share, due to concerns about one of the company's principal drugs. The concerns were justified when the FDA banned the drug. $1.00 per share of that decline in value already had been included in OCI as a temporary unrealized loss in a prior period. What journal entries should LED record to account for the decline in market value in the current period? How should the decline affect net income and comprehensive income?
Answer to relevant QuestionsLED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch's bonds fell by $450,000, due to concerns about one of the company's ...Shott Farm Supplies Corporation purchased 800 shares of General Motors stock at $50 per share and paid a brokerage fee of $1,200. Two months later, the shares were sold for $53 per share. The brokerage fee on the sale was ...The accounting records of Jamaican Importers Inc. at January 1, 2011, included the following:No changes occurred during 2011 in the investment portfolio.Required:Prepare appropriate adjusting entry(s) at December 31, 2011, ...Refer to the situation described in Exercise 12-17, but assume that Cameron bought 50% of the outstanding stock of Lake for $750 million cash, that half of the book value and fair value of Lake's individual net assets is ...Flower Corporation uses IFRS, and purchased €1,000,000 of James Company 5% bonds at face value during 2011. Unfortunately, a combination of problems at James Company and in the debt market caused the fair value of the ...
Post your question