Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Cost Fair Value Unrealized Holding Gain (Loss
Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Cost Fair Value Unrealized Holding Gain (Loss
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...
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Loreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the investments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale.
| Cost | Fair Value | Unrealized Holding Gain (Loss) |
||||||||||
| Short term: | ||||||||||||
| Blair, Inc. | $ | 480,000 | $ | 405,000 | $ | (75,000 | ) | |||||
| ANC Corporation | 450,000 | 480,000 | 30,000 | |||||||||
| Totals | $ | 930,000 | $ | 885,000 | $ | (45,000 | ) | |||||
| Long term: | ||||||||||||
| Drake Corporation | $ | 480,000 | $ | 560,000 | $ | 80,000 | ||||||
| Aaron Industries | 720,000 | 660,000 | (60,000 | ) | ||||||||
| Totals | $ | 1,200,000 | $ | 1,220,000 | $ | 20,000 | ||||||
Required:
1. Prepare appropriate
2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry?
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