142 143 144 the holding gains and losses on the

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Unformatted text preview: influence investee. and Consolidation :: Used when investor has effective control of investee. and Dividends :: Recognized as revenue for available-forsale investments, but not equity-method investments. 142. 143. 144. The holding gains and losses on the securities available for sale are reported as a separate component of shareholders' equity in the balance sheet and do not affect the income statement. 2013: Net Income would be increased by $2,000 due to the net unrealized holding gain on trading securities on companies A, B, and C. 2012: Net Income would be reduced by $10,000 due to the net unrealized holding loss on trading securities on companies A, B, and C. (2.) 145. (1.) (e.) Securities available for sale unrealized holding gains/losses are not reported in the statement of cash flows. (d.) The $8,000 unrealized loss will be added to net income in arriving at cash flows from operations. (c.) The $125,000 decrease in trading securities will be added to net income in arriving at cash flows from operations. (b.) The $80,000 to purchase securities available for sale will be shown as an investing cash outflow. 146. (a.) The $250,000 cash payment for trading securities will be reflected as an increase in the balance of trading securities and deducted from net income in arriving at cash flows from operations. 147. 30,000 x ($10 - $8) (2) This is an available-for-sale investment, so the fair value adjustment would appear as follows: 148. (1) The fair value of the investment is $8/share x 30,000 shares = $240,000. The internal valuation spet's valuation (considered a level 3 input per GAAP regarding fair value measurement) is used because there is no longer a reliable market quote (considered a level 1 input per GAAP regarding fair value measurement). 149. 150. 151. The first entry was to record the additional unrealized loss $3,564 thousand that Kirby had incurred from holding these securities. This raised the accumulated unrealized holding loss to $11,097 thousand on these i...
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This document was uploaded on 07/05/2013.

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