On January 1, 2020, Acker Inc. had the following balance sheet.

The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.?s available-for-sale debt securities at December 31, 2020, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.?s income statement for 2020 was as follows. (Ignore income taxes.)

Acker Inc.Income StatementFor the Year Ended December 31, 2020Dividend revenue....................................................$ 5,000Gain on sale of investments....................................30,000Net income..............................................................$35,000

Instructions

(Assume all transactions during the year were for cash.)

a. Prepare the journal entry to record the sale of the available-for-sale debt securities in 2020.

b. Prepare the journal entry to record the Unrealized Holding Gain or Loss for 2020.

c. Prepare a statement of comprehensive income for 2020.

d. Prepare a balance sheet as of December 31, 2020.

Transcribed Image Text:

Acker Inc. Balance Sheet As of January 1, 2020 Assets Equity Common stock Accumulated other comprehensive income Total Cash Debt investments (available-for-sale) $ 50,000 240,000 $260,000 Total $290,000 $290,000