Presented below is information related to the purchases of common stock by Culver Company during 2025.Investment in Arroyo Company stockInvestment in Lee Corporation stockInvestment in Woods Inc. stockTotal(a)(b)Cost(at purchase date)(a)$95,000247,000(b)183,000(Assume a zero balance for any Fair Value Adjustment account at the beginning of 2025.)No. Account Titles and Explanation$525,000Fair Value(at December 31)$74,000293,000194,000$561,000What entry would Culver make at December 31, 2025, to record the investment in Arroyo Company stock if it chooses toreport this security using the fair value option?(List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Ifno entry is required, select "No Entry" for the account titles and enter O for the amounts.)What entry would Culver make at December 31, 2025, to record the investments in the Lee and Woods corporations,assuming that Culver did not select the fair value option for these investments?DebitCredit

Investments are recorded using the fair value approach, which entails recording investments at their…

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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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 9P

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Refer to the information in RE13-11. Assume that on December 31, 2019, the investment in Cornett Company stock has a market value of 10,500. Prepare the year-end journal entry to record the unrealized gain or loss.
Dunn Company recognized a 5,000 unrealized holding gain on investment in Starbuckss long-term bonds during 2019. The company classified its investment as an available-for-sale security. How would this information be reported on a statement of cash flows prepared using the indirect method?
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.
Income Statement and Retained Earnings Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance: The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of 1.28 per share was declared and paid. 2. Land was sold at a pretax gain of 6,300. 3. Division X (a major component of the company) was sold at a pretax gain of 4,700. It had incurred a 9,500 pretax operating loss during 2019. 4. A tornado, which is an unusual event in the area, caused a 5,400 pretax loss. 5. The income tax rate on all items of income is 30%. 6. The average shareholders equity is 90,000. Required: 1. Prepare a 2019 multiple-step income statement for Huff. 2. Prepare a 2019 retained earnings statement. 3. Compute the 2019 return on common equity (Net Income 4 Average Shareholders Equity).
Presented below is information related to the purchases of common stock by Marigold Company during 2025. Investment in Arroyo Company stock Investment in Lee Corporation stock Investment in Woods Inc. stock Total (a) (b) Cost Fair Value (at purchase date) (at December 31) $102,000 $84,000 314,000 259,000 (b) 184,000 (Assume a zero balance for any Fair Value Adjustment account at the beginning of 2025.) $545,000 No. Account Titles and Explanation (a) 193,000 $591,000 What entry would Marigold make at December 31, 2025, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? What entry would Marigold make at December 31, 2025, to record the investments in the Lee and Woods corporations, assuming that Marigold did not select the fair value option for these investments? (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…
Presented below is information related to the purchases of common stock by Bridgeport Company during 2025. Fair Value (at December 31) $68,000 306,000 194,000 $568,000 Investment in Arroyo Company stock Investment in Lee Corporation stock Investment in Woods Inc. stock Total (a) (b) Cost (at purchase date) $90,000 252,000 (Assume a zero balance for any Fair Value Adjustment account at the beginning of 2025.) 184,000 (b) $526,000 What entry would Bridgeport make at December 31, 2025, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? No. Account Titles and Explanation (a) What entry would Bridgeport make at December 31, 2025, to record the investments in the Lee and Woods corporations, assuming that Bridgeport did not select the fair value option for these investments? (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry…
Presented below is information related to the purchases of common stock by Lilly Company during 2020. Cost(at purchase date) Fair Value(at December 31) Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000 Instructions (Assume a zero balance for any Fair Value Adjustment account.) a. What entry would Lilly make at December 31, 2020, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? b. What entry(ies) would Lilly make at December 31, 2020, to record the investments in the Lee and Woods corporations, assuming that Lilly did not select the fair value option for these investments?
Presented below is information related to the purchases of common stock by Cheyenne Company during 2020. Cost(at purchase date) Fair Value(at December 31) Investment in Arroyo Company stock $97,000 $76,000 Investment in Lee Corporation stock 266,000 311,000 Investment in Woods Inc. stock 176,000 185,000 Total $539,000 $572,000 (Assume a zero balance for any Fair Value Adjustment account.) (a) What entry would Cheyenne make at December 31, 2020, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? (b) What entry would Cheyenne make at December 31, 2020, to record the investments in the Lee and Woods corporations, assuming that Cheyenne did not select the fair value option for these investments? (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…
Wildhorse Company's December 31, 2024 stockholders' equity section reported Accumulated Other Comprehensive Income of $61000 which reflected cumulative gains. The following information is available for Wildhorse for 2025: Net income Realized gain on sale of available-for-sale debt securities Unrealized holding gain on available-for-sale debt securities Unrealized holding loss on available-for-sale equity securities What is Wildhorse's comprehensive income for 2025? O $266500 O $322500 O $307500 O $225500 $266500 36000 41000 21000
Presented below is information related to the purchases of common stock by Lilly Company during 2020. Cost (at purchase date) Fair Value (at December 31) Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000 In addition, assume that the investment in the Woods Inc. stock was sold during 2021 for $195,000. At December 31, 2021, the following information relates to its two remaining investments of common stock. Cost (at purchase date) Fair Value (at December 31) Investment in Arroyo Company stock $100,000 $140,000 Investment in Lee Corporation stock 250,000 310,000 Total $350,000 $450,000 Net income before any security gains and losses for 2021 was $905,000. Instructions a. Compute the amount of net income or net loss that Lilly should report for 2021, taking…
company's accounting year ends December 31. Date of Acquisition Cost 9/20/23 $38,000 10/2/23 14,000 Investment Colt Company stock Dana Company stock What amount is reported for gain or loss on these securities in 2023 income? Select one: O a. $800 loss O Fair Value 12/31/23 Date Sold Selling Price $37,000 2/10/24 $42,000 14,200 1/17/24 13,000 b. $1,000 loss c. No gain or loss d. $3,000 gain ہے

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