Prepare the adjusting entry at December 31, 2022, to show the securities at fair value. Wildhorse has less than a 20% ownership interest in all these common stocks (C Co., D Co., and E Co.). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Dec. 31 Account Titles and Explanation Fair Value Adjustment-Stock Unrealized Gain or Loss-Income Debit 3370 Credit 3370
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- Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.On December 31, 2021, the end of its first year of operations, Ivanhoe Associates owned the following securities that are held as long- term investments. Common Stock C Co. D Co. E Co. (a) July Aug. Sept. 1 Oct. 1 Nov. 1 Dec. Shares 15 980 On this date, the total fair value of the securities was equal to its cost. The securities are not held for influence or control over the investees. In 2022, the following transactions occurred. 31 5,420 1,297 1 Received $2.00 per share semiannual cash dividend on D Co. common stock. 1 Received $0.50 per share cash dividend on C Co. common stock. Sold 1,050 shares of D Co. common stock for cash at $10 per share. Sold 300 shares of C Co. common stock for cash at $50 per share. Received $1 per share cash dividend on E Co. common stock. Received $0.50 per share cash dividend on C Co. common stock Received $2.20 per share semiannual cash dividend on D Co. common stock Cost $44,100 39,566 25,940 At December 31, the fair values per share of the common…On January 1, 2021, the Oliswel Corporation purchased equity securities to be held for trading purposes for P2,000,000. The company also paid commission, taxes and other transaction costs amounting to P50,000. The securities had fair values at December 31, 2021 and 2022, respectively: P1,750,000 and P2,100,000. No securities were sold during 2022. What amount of unrealized gain or loss should be reported in the 2022 profit or loss section of the statement of comprehensive income? (A) P100,000 gain B P350,000 gain C) P200,000 loss (D P250,000 loss
- On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000Presented below is selected information related to the financial instruments of Novak Company at December 31, 2025. This is Novak Company's first year of operations. Carrying Amount Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $42,600 $43,500 Investment in Chen Company stock 737,000 856,500 Bonds payable 241,500 217,100 (a) Novak elects to use the fair value option for these investments. Assuming that Novak's net income is $108,000 in 2025 before reporting any securities gains or losses, determine Novak's net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration. Novak's net income for 2025 $ 228,400 (b) Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…On January 5, 2021, Milk Tea Company purchased equity securities for P2,500,000. The company also paid transaction costs amounting to P43,000 and classified the investments at fair value through other comprehensive income. The fair values of the equity securities were P2,600,000 and P2,400,000 on December 31, 2021 and December 31, 2022, respectively. What amount of unrealized gain or (loss) should be reported in the statement of comprehensive income for the year ended December 31, 2022?
- The following information is available for Sheridan Company at December 31, 2025, regarding its investments. Securities Cost Fair Value 2,400 shares of Myers Corporation common stock $40,200 $48,200 900 shares of Cole Incorporated preferred stock 24,500 21,600 $64,700 $69,800 Prepare the adjusting entry (if any) for 2025, assuming no balance in the Fair Value Adjustment account at January 1, 2025. Neither of Sheridan's investments result in significant influence. Assume the securities as trading securities. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental's investments are large enough to exert significant influence on the investee. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired Distribution Transformers Corporation common stock for $400,000. Sep. 1 Acquired $900,000 of American Instruments' common stock. Sep. 30 Received a $16,000 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $425,000. Nov. 1 Purchased $1,400,000 of M&D Corporation common stock. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American Instruments common stock $ 850,000 M&D Corporation common stock $1,460,000 Required: 1. Prepare the appropriate journal entry…The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental’s investments are large enough to exert significant influence on the investee. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired Distribution Transformers Corporation common stock for $530,000. Sep. 1 Acquired $1,095,000 of American Instruments' common stock. Sep. 30 Received a $15,900 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $568,000. Nov. 1 Purchased $1,530,000 of M&D Corporation common stock. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American Instruments common stock $ 1,032,000 M&D Corporation…
- On January 5, 2020, Splish Brothers Company purchased the following stock securities: 282 shares Bonter Corporation common stock for $4,230. 470 shares Wane Corporation common stock for $9,400. 752 shares Strauss Corporation common stock for $21,432. Assume that Splish Brothers Company cannot exercise significant influence over the activities of the investee companies and that the cost method is used to account for the investments.On June 30, 2020, Splish Brothers Company received the following cash dividends: Bonter Corporation$2.00 per share Wane Corporation$1.00 per share Strauss Corporation$1.50 per share On November 15, 2020, Splish Brothers Company sold 156 shares of Strauss Corporation common stock for $7,020.On December 31, 2020, the fair value of the securities held by Splish Brothers Company is as follows: Bonter Corporation common stock $10 Wane Corporation common stock 16 Strauss Corporation common stock 28Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…Runner Corporation, which reports under IFRS, has the following investments at December 31, 2024: 2. 3. 4. Trading investments: common shares of National Bank, cost $36,500, fair value $43,400. Investment in an associate (40% ownership): common shares of Sword Corp., cost $218,200, fair value cannot be determined because the shares do not trade publicly. Runner purchased the investment on January 1, 2024. For the year ended December 31, 2024, Sword Corp. reported net income of $46,600 and declared and paid dividends of $15,800. Equity investment: common shares of Epee Inc. (19% ownership) purchased on July 1, 2024, cost $423,300, fair value at December 31, 2024, $545,200. Management intends to purchase more shares of Epee in two years. Epee earned $39,900 for the year ended December 31, 2024, and declared and paid dividends of $1,800, which Runner received at the end of each quarter in 2024. Bond investment to be held to maturity: bonds of Ghoti Ltd., purchased at a cost equal to its…