. Problem 7.5A (Static) Accounting for Marketable Securities...

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Problem 7.5A (Static) Accounting for Marketable Securities (LO7-1 ,LO7-4) At December 31, year 1, Charter Holding Co. owned the following marketable securities in capital stock of publicly traded companies. Current Market Cost Value L Brands, Inc. (5,000 shares: cost, $44 per share; market value, $52) $ 220,000 $ 260,000 The Gap, Inc. (4,000 shares: cost, $42 per share; market value, $39) 168,000 156,000 $ 388,000 $ 416,000 In year 2, Charter engaged in the following two transactions. Apr.10 Sold 1,000 shares of its investment in L Brands, Inc., at a price of $58 per share, less a brokerage commission of $100. Aug. 7 Sold 2,000 shares of its investment in The Gap, Inc., at a price of $37 per share, less a brokerage commission of $150. At December 31, year 2, the market values of these stocks were: L Brands, Inc., $67 per share; and The Gap, Inc., $37 per share. Required: a-1. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December 31, year 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear.

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I. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end ofyear 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. M. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Calculate the amount of marketable securities reported in the asset section of Charter's financial statements at December 31, year 1. $ 416,000 Rqu2 >

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a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req Al Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. Unrealized holding gain on investments $ 28,000 < Req A1 Req B >

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f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Prepare journal entries to record the transactions on April 10 and August 7. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) View transaction list View journal entry worksheet X No Date General Journal Debit Credit 1 Apr. 10 Cash 57,900 Gain on sale of investments 7,900 Marketable securities 50,000 2 Aug.07 Cash 73,850 Loss on sale of investments Marketable securities < Req A2 Req C1 >

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a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account Marketable securities < Req B Req C2 >

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b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. < Req C1 Req D >

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c-1. Prior to making a mark-to-market adjustment at the end ofyear 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark—to—market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. M. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req E Req F1 Req F2 Req G Prepare a schedule showing the cost and the market values of securities owned at the end of year 2.

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Req A1 Req A2 Reg B Req C1 Req C2 Req D Req E Req F1 Req F2 Reg G Prepare the fair value adjusting entry required at December 31, year 2. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.) View transaction list Journal entry worksheet Record to increase unadjusted balance in Marketable Securities account to current market value. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

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a- I. VUILUILLE LITE UITIVUEL VI IIIUIACLUNIC SECUIILIES I CIVILCU III LIC USSEL SECLIVII VI VIIUILCI S IIIIIICIAI SLULCITICHILS UL VECCHIINGI JI, yEUI 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Calculate the amount of marketable securities in the financial statements at December 31, year 2. Marketable securities < Req E Req F2 >

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a- I. VUILUILLE LITE UITIVUEL VI IIIUIACLUNIC SECUIILIES I CIVILCU III LIC USSEL SECLIVII VI VIIUILCI S IIIIIICIAI SLULCITICHILS UL VECCHIINGI JI, yEUI 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. < Req F1 Req G >

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a- I. VUILUILLE LITE UITIVUEL VI IIIUIACLUNIC SECUIILIES I CIVILCU III LIC USSEL SECLIVII VI VIIUILCI S IIIIIICIAI SLULCITICHILS UL VECCHIINGI JI, yEUI 1. a-2. Calculate the amount of unrealized gain or loss reported in the stockholders' equity section of Charter's financial statements at December 31, year 1. b. Prepare journal entries to record the transactions on April 10 and August 7. c-1. Prior to making a mark-to-market adjustment at the end of year 2, determine the unadjusted balance in the Marketable Securities control account. c-2 Prior to making a mark-to-market adjustment at the end of year 2, determine the Unrealized Holding Gain (or Loss) on Investments account. d. Prepare a schedule showing the cost and the market values of securities owned at the end of year 2. e. Prepare the fair value adjusting entry required at December 31, year 2. f-1. Calculate the amount of marketable securities in the financial statements at December 31, year 2. f-2. Calculate the amount of unrealized holding gain (or loss) in the financial statements at December 31, year 2. g. Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C1 Req C2 Req D Req E Req F1 Req F2 Req G Illustrate the presentation of the net realized gains (or losses) in the year 2 income statement. Assume a multiple-step income statement and show the caption identifying the section in which this amount would appear. Non-operating items: < Req F2 Req G >

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