At December 31, year 1, Charter Holding Co. owned the following investments in capital stock of...
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At December 31, year 1, Charter Holding Co. owned the following investments in capital stock of publicly traded companies (classified as available-for-sale securities). Current Market Value $ 260,000 Cost L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52) The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39) $ 220,000 168,000 $ 388,000 156,000 416,000 In year 2, Charter engaged in the following two transactions. Apr. 10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Ic., $37 per share. Required: a-1. Calculate the amount of marketable securities reported in the asset section of Charter's balance sheet at December 31, year 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's balance sheet at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. (Assume that no unrealized gains or losses have been recognized since last year.) c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. (Assume that no unrealized gains or losses have been recognized since last year.) d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the balance sheet at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Reg A1 Reg A2 Reg B Reg C1 Reg C2 Reg D Reg E Reg F1 Reg F2 Reg G Prepare the fair value adjusting entry required at December 31, year 2. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 Marketable securities 60,000 X Unrealized holding gain on investments 60,000 x Loss on sale of investments 4,000 X Marketable securities 4,000 X Reg A1 Reg A2 Reg B Req C1 Reg C2 Req D Reg E Reg F1 Req F2 Req G Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. Unrealized holding gain on investments 56,000 e. Prepare the fair value adjusting entry required at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. HELP KNOWING THIS MIGHT HELP: Calculate the amount of marketable securities reported in the asset section of Charter's balance sheet at December 31, year 1. Marketable securities 416,000 O Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's balance sheet at December 31, year 1. Unrealized holding gain on investments 28,000 O Prepare journal entries to record the transactions on April 10 and August 7. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) No Date General Journal Debit Credit Apr. 10 Cash 57,900 O Marketable securities 44,000 O Gain on sale of investments 13,900 O 2 Aug.07 Cash 73,850 O Loss on sale of investments 10,150 O Marketable securities 84,000 O Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. (Assume that no unrealized gains or losses have been recognized since last year.) Marketable securities $ 288,000 O Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. (Assume that no unrealized gains or losses have been recognized since last year.) Unrealized holding gain on investments 28,000 O Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. Current Market Cost Value L Brands, Inc. 176,000 O $ 268.000 O Gap, Inc. 84,000 O 74.000 O Totals 260,000 342.000 E------UNKNOWN NEED HELP ? Record to reduce unadjusted balance in Marketable Securities account to current market value. Note: Enter debits before credits. Transaction General Journal Debit Credit Marketable securities Unrealized holding gain on investments Calculate the amount of marketable securities in the balance sheet at December 31, year 2. Marketable securities 342,000 O F2------UNKNOWN ----NEED HELP Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. Unrealized holding gain on investments Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Non-operating items: Net gain on sale of investments O $ 3,750 O At December 31, year 1, Charter Holding Co. owned the following investments in capital stock of publicly traded companies (classified as available-for-sale securities). Current Market Value $ 260,000 Cost L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52) The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39) $ 220,000 168,000 $ 388,000 156,000 416,000 In year 2, Charter engaged in the following two transactions. Apr. 10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Ic., $37 per share. Required: a-1. Calculate the amount of marketable securities reported in the asset section of Charter's balance sheet at December 31, year 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's balance sheet at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. (Assume that no unrealized gains or losses have been recognized since last year.) c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. (Assume that no unrealized gains or losses have been recognized since last year.) d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the balance sheet at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Reg A1 Reg A2 Reg B Reg C1 Reg C2 Reg D Reg E Reg F1 Reg F2 Reg G Prepare the fair value adjusting entry required at December 31, year 2. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 Marketable securities 60,000 X Unrealized holding gain on investments 60,000 x Loss on sale of investments 4,000 X Marketable securities 4,000 X Reg A1 Reg A2 Reg B Req C1 Reg C2 Req D Reg E Reg F1 Req F2 Req G Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. Unrealized holding gain on investments 56,000 e. Prepare the fair value adjusting entry required at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. HELP KNOWING THIS MIGHT HELP: Calculate the amount of marketable securities reported in the asset section of Charter's balance sheet at December 31, year 1. Marketable securities 416,000 O Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's balance sheet at December 31, year 1. Unrealized holding gain on investments 28,000 O Prepare journal entries to record the transactions on April 10 and August 7. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) No Date General Journal Debit Credit Apr. 10 Cash 57,900 O Marketable securities 44,000 O Gain on sale of investments 13,900 O 2 Aug.07 Cash 73,850 O Loss on sale of investments 10,150 O Marketable securities 84,000 O Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. (Assume that no unrealized gains or losses have been recognized since last year.) Marketable securities $ 288,000 O Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. (Assume that no unrealized gains or losses have been recognized since last year.) Unrealized holding gain on investments 28,000 O Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. Current Market Cost Value L Brands, Inc. 176,000 O $ 268.000 O Gap, Inc. 84,000 O 74.000 O Totals 260,000 342.000 E------UNKNOWN NEED HELP ? Record to reduce unadjusted balance in Marketable Securities account to current market value. Note: Enter debits before credits. Transaction General Journal Debit Credit Marketable securities Unrealized holding gain on investments Calculate the amount of marketable securities in the balance sheet at December 31, year 2. Marketable securities 342,000 O F2------UNKNOWN ----NEED HELP Calculate the amount of unrealized holding gain (or loss) in the balance sheet at December 31, year 2. Unrealized holding gain on investments Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Non-operating items: Net gain on sale of investments O $ 3,750 O
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a1 Marketable securities reported in balance sheet at December 31 year 1 416000 a2 Unrealized gain o... View the full answer
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Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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