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Missing Statement Items, Available-for-Sale Securities Oceanic Airways makes investments in available-for-sale securities. Selected income statement items...

Missing Statement Items, Available-for-Sale Securities

Oceanic Airways makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, 2016 and 2017, plus selected items from comparative balance sheets, are shown in the income statement and balance sheet below: (There were no dividends.)

Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.

Oceanic Airways
Selected Income Statement Items
For the Years Ended December 31, 2016 and 2017
	2016	2017
Operating Income (Loss)	$	$
Gain (Loss) from Sale of Investments	4200	(8400)
Net Income (Loss)	$	$(11550)

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Oceanic Airways
Selected Balance Sheet Items
December 31, 2015, 2016, and 2017
	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2017
Assets
Available-for-Sale Investments, at Cost	$81900	$71400	$99750
Valuation Allowance for Available-for-Sale Investments	5250	(6300)
Available-for-Sale Investments, at Fair Value
Stockholders' Equity
Unrealized Gain (Loss) on Available-for-Sale Investments			(7,350)
Retained Earnings	$172200	$243600	$

Solutions

Expert Solution

1.Income statement items for the Year ended December 31, 2016 and 2017

Particulars

Year 2016

Year 2017

Operating income (Loss)

Gain (Loss) from sale of investment

$67,200 (71400-4200)

$4200

($3150) [8400 - 11550]

($8400)

Net income (loss)

$71,400

($11550)

Note :

Net income for the year ending on December 31, 2016 :

= Retained earnings as on Dec 31st 2016 - Retained earnings as on Dec 31st 2015

= 243,600- 172,200

= $71,400

2.Balance sheet items for the Year ended December 31, 2015, 2016 and 2017

Oceanic Airways
Selected Balance Sheet Items
December 31, 2015, 2016, and 2017
	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2017
Assets
Available-for-Sale Investments, at Cost	$81,900	$71,400	$99,750
Valuation Allowance for Available-for-Sale Investments	$5,250	($6,300)	($7,350)
Available-for-Sale Investments, at Fair Value	$87,150	$65,100	$92,400
Stockholders' Equity
Unrealized Gain (Loss) on Available-for-Sale Investments	$5,250	($6300)	($7,350)
Retained Earnings	$172,200	$243,600	$232,050

Notes:

1.Retained earnings balance as on December 31, 2017 :

= Retained earnings as on Dec 31st 2016 + Net income (loss) as on Dec 31st 2017

= $243,600 - $11550

= $232,050

2. Available for Sale Investments, at Fair Value 2015 =

Available for Sale Investments, At Cost 2015 + Valuation Allowance for Available-for-Sale Investments

=$81,900 + $5,250

=$87,150

3. Unrealised Gain (Loss) on Available-for-Sale investments =Valuation allowance for Available for sale of investments = $5,250

4. In similar way Available for Sale Investments, at Fair Value 2016 and Unrealised Gain (Loss) on Available-for-Sale investments for 2016 is calculated.

5.Valuation Allowance for Available-for-Sale Investments, 2017 = Unrealized Gain (Loss) on Available-for-Sale Investments, 2016 = ($7350)

6. Available for Sale Investments, at Fair Value 2017 =

Available for Sale Investments, At Cost 2017 + Valuation Allowance for Available-for-Sale Investments

=$99750 + ($7,350)

=$92,400

ekkarill92 answered 1 year ago

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