3-24-11 Solutions

3-24-11 Solutions - PROBLEM 17-7(a February 1...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
PROBLEM 17-7
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
(a) February 1 Available-for-Sale Securities. .................................. 300,000 Interest Revenue (4/12 X .10 X $300,000). .............. 10,000 Cash. .................................................................. 310,000 April 1 Cash. .......................................................................... 15,000 Interest Revenue ($300,000 X .10 X 6/12). ...... 15,000 July 1 Available-for-Sale Securities. .................................. 200,000 Interest Revenue (1/12 X .09 X $200,000). .............. 1,500 Cash. .................................................................. 201,500 September 1 Cash [($60,000 X 99%) + ($60,000 X .10 X 5/12)]. ... 61,900 Loss on Sale of Securities. ..................................... 600 Available-for-Sale Securities. .......................... 60,000 Interest Revenue (5/12 X .10 X $60,000 = $2,500). ................... 2,500 October 1 Cash [($300,000 – $60,000) X .10 X 6/12]. ............... 12,000 Interest Revenue. .............................................. 12,000 December 1 Cash ($200,000 X 9% X 6/12). .................................. 9,000 Interest Revenue. .............................................. 9,000
Background image of page 2
PROBLEM 17-7 (Continued) December 31 Interest Receivable. .................................................. 7,500 Interest Revenue. .............................................. 7,500 (3/12 X $240,000 X .10 = $6,000) (1/12 X $200,000 X .09 = $1,500) ($6,000 + $1,500 = $7,500) December 31 Unrealized Holding Gain or Loss—Equity. ............ 26,000 Securities Fair Value Adjustment (Available-for-Sale). ...................................... 26,000 Available-for-Sale Portfolio Security Cost Market Unrealized Gain (Loss) Gibbons Co. $240,000 $228,000* $(12,000) Sampson, Inc. 200,000 186,000 ** (14,000 ) Total $440,000 $414,000 $26,000 *$240,000 X 95% **$200,000 X 93% (Note to instructor : Some students may debit Interest Receivable at date of purchase instead of Interest Revenue. This procedure is
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 10

3-24-11 Solutions - PROBLEM 17-7(a February 1...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online