Key_HW7_Q3_Q5 - 360,000 (b) Investor's reported dividend...

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Q3) (a) AFS Securities Dividend Dr. Cash 150,000 Cr, Dividend revenue 150,000 Dr. Cash 150,000 Cr, Dividend revenue 150,000 Fair value adjustment Dr. Unrealized holding loss (AFS) 225,000 (=3,375,000 - 3,600,000) Cr. Securities fair value adjustment (AFS) 225,000 (b) Equity method Dividend Dr. Cash 150,000 Cr. Investment asset 150,000 Dr. Cash 150,000 Cr. Investment asset 150,000 Net income of investeee Dr. Investment asset 300,000 Cr. Revenue from investment 300,000 (c) F/S presentation Balance sheet AFS Equity method Investment assets 3,600,000 3,600,000 AFS fair value adjustment -225,000 Dividend 0 -300,000 Net income of investee 0 300,000 3,375,000 3,600,000 Income statement Dividend revenue 300,000 0 Investment revenue 0 300,000 Q4) (a) Investor's reported invest revenue
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Unformatted text preview: 360,000 (b) Investor's reported dividend receipt 270,000 (c) Investee's reported net income 1,200,000 (=360,000/0.3) (d) Investee's reported dividend payment 900,000 (=270,000/0.3) Q5) (a) 2007 adjusting entry: Dr. Securities fair value adjustment 18,500 Cr. Unrealized holding gain (I/S) 18,500 (b) May sale: Dr. Cash 112,350 (=230*500 - 2,650) Loss from sale 12,400 Cr, Investment (T/S) 124,750 (c) October sale: Dr. Cash 62,770 Loss from sale 12,080 Cr.Investment (T/S) 74,850 (d) 2008 adjusting entry Dr, Unrealized loss 11,100 Cr. Securities fair value adjustment (T/S) 11,100 (=199,600/800*500) (=18,500 - 7,400)...
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This note was uploaded on 10/07/2010 for the course ACC 5100 taught by Professor Andrews during the Winter '09 term at Wayne State University.

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Key_HW7_Q3_Q5 - 360,000 (b) Investor's reported dividend...

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