At the end of 2020, Terry Company prepared the following schedule of equity investments: Security Cost 12/31/20
Question:
At the end of 2020, Terry Company prepared the following schedule of equity investments:
Security Cost 12/31/20 Fair value Cumulative Changes in FV
M 37,000 34,200 -2,800
N 42,000 43,100 1,100
Total 79,000 77,300 -1,700
During 2021, the following transaction occurred:
June 8: Purchased equity securities O (<20% holding) for $50,000
Oct 11: Sold all of the M securities for $35,400
Dec 31: Received dividends of $900 on the N and O securities, and the year-end total market values were available: The N securities, $43,900; the O securities, $49,600.
A. How much was the ending balance of its equity investments by 12/31/2021?
A.0
B.92,000
C.93,500
D. None Above
B. What was the total impact on the company's net income for year 2021?
A.0
B. -1,600
C. 1,600
D. None above
C. How much was its gain/loss on sale of equity investments for year 2021?
A. 0
B. -1,600
C. 1,200
D. None above
Expert Answer:
A The ending balance of equity investments on December 31 2021 can be calculated as follows Fair val... View the full answer
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
