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AC323 CHAPTER 17 HW SOLUTIONS

# AC323 CHAPTER 17 HW SOLUTIONS - 1,000 Securities Fair Value...

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CHAPTER 17 Investments Homework Solutions (Textbook Version) Excluding Non-Algorithmic Assignments EXERCISE 17-5 (a) Schedule of Interest Revenue and Bond Discount Amortization Straight-line Method 9% Bond Purchased to Yield 12% Date Cash Received Interest Revenue Bond Discount Amortization Carrying Amount of Bonds 1/1/10 \$278,384 12/31/10 \$27,000 \$34,205 * \$7,205* 285,589 12/31/11 27,000 34,205 7,205 292,794 12/31/12 27,000 34,206** 7,206 300,000 * *(\$300,000 – \$278,384) ÷ 3 = \$7,205 **Rounded by \$1. (b) Schedule of Interest Revenue and Bond Discount Amortization Effective-Interest Method 9% Bond Purchased to Yield 12% Date Cash Received Interest Revenue Bond Discount Amortization Carrying Amount of Bonds 1/1/10 \$278,384.00 12/31/10 \$27,000 \$33,406.08* \$6,406.08 284,790.08 12/31/11 27,000 34,174.81 7,174.81 291,964.89 12/31/12 27,000 35,035.11** 8,035.11 300,000.00 * *\$278,384 X .12 = \$33,406.08 **Rounded by \$.68.

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EXERCISE 17-5 (Continued) (c) December 31, 2011 Cash. ......................................................................... 27,000.00 Held-to-Maturity Securities . .................................... 7,205.00 Interest Revenue . ............................................. 34,205.00 (d) December 31, 2011 Cash. ......................................................................... 27,000.00 Held-to-Maturity Securities . .................................... 7,174.81 Interest Revenue . ............................................. 34,174.81 EXERCISE 17-14 1. Trading Securities (300 shares X \$40) . .................. 12,000 Cash. ............................................................ 12,000 2. Cash (100 shares X \$43) . ........................................ 4,300 Gain on Sale of Stock. ................................ 300 Trading Securities (100 X \$40). .................. 4,000 3. Unrealized Holding Gain or Loss—Income .
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Unformatted text preview: .......... 1,000 Securities Fair Value Adjustment (Trading Securities) (\$40 – \$35) X 200. . 1,000 EXERCISE 17-15 (a) Unrealized Holding Gain or Loss—Income. ............. 5,900 Securities Fair Value Adjustment (Trading) . .... 5,900 (b) Cash [(1,500 X \$45) – \$1,200] . ................................... 66,300 Loss on Sale of Securities . ....................................... 5,200 Trading Securities. ............................................. 71,500 (c) Trading Securities [(700 X \$75) + \$1,300]. ................ 53,800 Cash . ................................................................... 53,800 EXERCISE 17-15 (Continued) (d) Securities Cost Fair Value Unrealized Holding Gain (Loss) Beilman Corp., Common \$180,000 \$175,000 \$ (5,000) McDowell Corp., Common 53,800 50,400 (3,400) Duncan, Inc., Preferred 60,000 58,000 (2,000 ) Total portfolio \$293,800 \$283,400 (10,400) Previous securities fair value adjustment—Cr. (5,900 ) Securities fair value adjustment—Cr. \$ (4,500 ) Unrealized Holding Gain or Loss— Income . .......................................................... 4,500 Securities Fair Value Adjustment (Trading) . ........................... 4,500 EXERCISE 17-17 Investment in Pirates Co. Stock . ........................... 200,000 Cash . ................................................................ 200,000 Cash (\$20,000 X .25) . .............................................. 5,000 Investment in Pirates Co. Stock. .................... 5,000 Investment in Pirates Co. Stock . ........................... 20,000 Revenue from Investment (.25 X \$80,000) . ............................................ 20,000...
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AC323 CHAPTER 17 HW SOLUTIONS - 1,000 Securities Fair Value...

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