24. At the end of Year 3, Shore Co. held trading securities that cost $17,500 and had a year-end market value of $19,000. All these securities were sold at the beginning of Year 4 for $22,000. During Year 4, Shore transferred securities classified as available-for-sale to trading securities. At the time of the transfer, these securities had a fair value of $30,000 and an unrealized holding gain of $4,000. For the year ended on December 31, Year 4, what is the impact of these transactions on Shore's income statement? A. Gain of $3,000.

24. At the end of Year 3, Shore Co. held trading securities that cost $17,500 and had a year-end market value of $19,000. All these securities were sold at the beginning of Year 4 for $22,000. During Year 4, Shore transferred securities classified as available-for-sale to trading securities. At the time of the transfer, these securities had a fair value of $30,000 and an unrealized holding gain of $4,000. For the year ended on December 31, Year 4, what is the impact of these transactions on Shore's income statement? A. Gain of $3,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Victoria Company has investments in marketable securities classified as trading and available-for-sale. At the beginning of the year, the aggregate market value of each portfolio exceeded its amortized cost. During the year, Victoria sold some securities from each portfolio. At the end of the year, the aggregate amortized cost of each portfolio exceeded its market value. Victoria also has investments in bonds classified as held-to-maturity, all of which were purchased for face value. During the year, some of these bonds held by Victoria were called prior to their maturity by the bond issuer. Three months before the end of the year, additional similar bonds were purchased for face value plus 2 months accrued interest. Required: 1. Explain how Victoria accounts for: a. sale of securities from each portfolio b. each equity securities portfolio at year-end 2. Explain how Victoria accounts for the disposition prior to their maturity of the long-term bonds called by their issuer. 3. Explain how Victoria reports the purchase of the additional similar bonds at the date of the acquisition.
On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000
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