Question
In: Accounting
Blue Spruce Corporation made the following purchases of investments during 2020, the first year in which...
Blue Spruce Corporation made the following purchases of investments during 2020, the first year in which Blue Spruce invested in equity securities:
| 1. | On January 15, purchased 10,350 shares of Nirmala Corp.’s common shares at $38.50 per share plus commission of $2,277. | |
| 2. | On April 1, purchased 5,750 shares of Oxana Corp.’s common shares at $60 per share plus commission of $3,876. | |
| 3. | On September 10, purchased 8,050 shares of WTA Corp.’s preferred shares at $30.50 per share plus commission of $3,347. |
On May 20, 2020, Blue Spruce sold 3,450 of the Nirmala common
shares at a market price of $40 per share less brokerage
commissions of $3,278. The year-end fair values per share were as
follows: Nirmala $35, Oxana $63, and WTA $32. The chief accountant
of Blue Spruce tells you that Blue Spruce Corporation holds these
investments with the intention of selling them in order to earn
short-term profits from appreciation in their prices and accounts
for them using the FV-NI model.
Assume that Blue Spruce Corporation follows IFRS 9.
Blue Spruce Corporation made the following purchases of investments during 2020, the first year in which Blue Spruce invested in equity securities:
| 1. | On January 15, purchased 10,350 shares of Nirmala Corp.’s common shares at $38.50 per share plus commission of $2,277. | |
| 2. | On April 1, purchased 5,750 shares of Oxana Corp.’s common shares at $60 per share plus commission of $3,876. | |
| 3. | On September 10, purchased 8,050 shares of WTA Corp.’s preferred shares at $30.50 per share plus commission of $3,347. |
On May 20, 2020, Blue Spruce sold 3,450 of the Nirmala common
shares at a market price of $40 per share less brokerage
commissions of $3,278. The year-end fair values per share were as
follows: Nirmala $35, Oxana $63, and WTA $32. The chief accountant
of Blue Spruce tells you that Blue Spruce Corporation holds these
investments with the intention of selling them in order to earn
short-term profits from appreciation in their prices and accounts
for them using the FV-NI model.
Assume that Blue Spruce Corporation follows IFRS 9.
| Account Titles | Debit | Credit |
| Jan. 15 FV-NI Investments | 398786 | |
| Investment Income or Loss | 2277 | |
| Cash | 401063 | |
| April 1. FV-NI Investments | 345000 | |
| Investment Income or Loss | 3876 | |
| Cash | 348876 | |
| Sep. 10 FV-NI Investments | 245364 | |
| Investment Income or Loss | 3347 | |
| Cash | 248711 |
Prepare the journal entry for the sale of the 3,450 Nirmala shares on May 20.
| Account Titles | Debit | Credit |
| May 20. Cash | 134722 | |
| FV-NI Investments | 132825 | |
| Gain on Disposal of Investments - FV-NI | 1897 |
Prepare the adjusting entry needed on December 31, 2020.
| Account Titles | Debit | Credit |
| FV-NI Investments | 5175 | |
| Investment Income or Loss | 5175 |
Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Blue Spruce’s policy is to capitalize transaction costs on the acquisition of FV-OCI investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings.
| Account Titles | Debit | Credit |
| (To adjust to fair value at date of disposal) (8 entries above) | ||
| (To record disposal) (2 entries) | ||
| (To reclassify holding gain) (2 entries) | ||
| December 31, To finish everything which are 2 entries here | ||
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Novak Corporation made the following purchases of investments during 2017, the first year in which Novak...
Novak Corporation made the following purchases of investments
during 2017, the first year in which Novak invested in equity
securities:
1.
On January 15, purchased 7,470 shares of Nirmala Corp.’s common
shares at $27.81 per share plus commission of $1,643.
2.
On April 1, purchased 4,150 shares of Oxana Corp.’s common
shares at $43 per share plus commission of $2,797.
3.
On September 10, purchased 5,810 shares of WTA Corp.’s
preferred shares at $22.00 per share plus commission of
$2,415....
Metlock Corporation made the following cash purchases of securities during 2017, which is the first year...
Metlock Corporation made the following cash purchases of
securities during 2017, which is the first year in which Metlock
invested in securities. 1. On January 15, purchased 10,150 shares
of Sanchez Company’s common stock at $46.90 per share plus
commission $2,130. 2. On April 1, purchased 5,150 shares of Vicario
Co.’s common stock at $72.80 per share plus commission $3,520. 3.
On September 10, purchased 7,150 shares of WTA Co.’s preferred
stock at $37.10 per share plus commission $5,060. On...
Metlock Corporation made the following cash purchases of securities during 2017, which is the first year...
Metlock Corporation made the following cash purchases of
securities during 2017, which is the first year in which Metlock
invested in securities. 1. On January 15, purchased 10,150 shares
of Sanchez Company’s common stock at $46.90 per share plus
commission $2,130. 2. On April 1, purchased 5,150 shares of Vicario
Co.’s common stock at $72.80 per share plus commission $3,520. 3.
On September 10, purchased 7,150 shares of WTA Co.’s preferred
stock at $37.10 per share plus commission $5,060. On...
Swifty Corporation made the following cash purchases of securities during 2017, which is the first year...
Swifty Corporation made the following cash purchases of
securities during 2017, which is the first year in which Swifty
invested in securities. 1. On January 15, purchased 10,050 shares
of Sanchez Company’s common stock at $40.20 per share plus
commission $2,030. 2. On April 1, purchased 5,050 shares of Vicario
Co.’s common stock at $62.40 per share plus commission $3,420. 3.
On September 10, purchased 7,050 shares of WTA Co.’s preferred
stock at $31.80 per share plus commission $4,960. On...
During 2020, Blue Spruce Corporation started a construction job with a contract price of $6.16 million....
During 2020, Blue Spruce Corporation started a construction job
with a contract price of $6.16 million. Blue Spruce ran into severe
technical difficulties during construction but managed to complete
the job in 2022. The contract is non-cancellable. Under the terms
of the contract, Blue Spruce sends billings as revenues are earned.
Billings are non-refundable. The following information is
available:
2020
2021
2022
Costs incurred to date
$ 880,000
$3,080,000
$6,060,000
Estimated costs to complete
4,620,000
3,080,000
-0-
Calculate the amount...
Exercise 17-11 Concord Corporation made the following cash purchases of securities during 2020, which is the...
Exercise 17-11
Concord Corporation made the following cash purchases of
securities during 2020, which is the first year in which Concord
invested in securities.
1.
On January 15, purchased 11,000 shares of Sanchez Company’s
common stock at $33.50 per share plus commission $2,184.
2.
On April 1, purchased 5,500 shares of Vicario Co.’s common
stock at $52 per share plus commission $3,701.
3.
On September 10, purchased 7,700 shares of WTA Co.’s preferred
stock at $26.50 per share plus commission...
During its first year of operations, Maine Corporation made the following inventory purchases and sales. Date...
During its first year of operations, Maine Corporation made the
following inventory purchases and sales.
Date
Units Purchased/(Sold)
Cost Per Unit
Inventory Balance
(in units)
April 3
5,000
$4.25
5,000
April 10
2,000
$4.00
7,000
April 16
(4,000)
3,000
April 20
5,000
$4.50
8,000
April 25
2,000
$4.75
10,000
Calculate ending inventory and cost
of goods sold using the 1) FIFO method under a periodic inventory
system 2) FIFO method under a perpetual inventory system 3) LIFO
method under a...
The comparative statement of financial position of Blue Spruce Corporation as at December 31, 2020, follows:...
The comparative statement of financial position of Blue Spruce
Corporation as at December 31, 2020, follows:
The comparative statement of financial position of Monty Inc. as
at June 30, 2020, and a statement of comprehensive income for the
2020 fiscal year follow:
MONTY INC.
Statement of Financial Position
June 30, 2020
June
30
Assets
2020
2019
Cash
$
20,000
$
42,000
Accounts receivable
86,100
74,100
Inventory
104,000
102,000
Prepaid expenses
2,100
5,600
FV-OCI investments
47,100
45,200
Equipment
177,000
159,000
Accumulated...
The comparative statement of financial position of Blue Spruce Corporation as at December 31, 2020, follows:...
The comparative statement of financial position of Blue Spruce
Corporation as at December 31, 2020, follows: BLUE SPRUCE
CORPORATION Statement of Financial Position December 31 December 31
Assets 2020 2019 Cash $ 53,500 $ 11,900 Accounts receivable 89,600
87,200 Equipment 26,200 21,700 Less: Accumulated depreciation
(9,800 ) (10,800 ) Total $ 159,500 $ 110,000 Liabilities and
Shareholders’ Equity Accounts payable $ 20,300 $ 15,500 Common
shares 100,000 79,600 Retained earnings 39,200 14,900 Total $
159,500 $ 110,000 Net income of...
Statement of financial position items for Blue Spruce Inc. follow for the current year, 2020: Goodwill...
Statement of financial position items for Blue Spruce Inc.
follow for the current year, 2020:
Goodwill
$133,750
Accumulated depreciation—equipment
$312,440
Bank loan
190,022
Inventory
256,586
Bonds payable due 2024
303,900
Rent payable
48,150
Cash
385,200
Income tax payable
105,247
Land
513,600
Rent payable (long-term)
513,600
Notes receivable
476,899
Common shares (20,000 shares issued)
214,000
Notes payable
283,550
Preferred shares (15,000 shares issued)
160,500
Accounts payable
524,300
Prepaid expenses
94,074
Retained earnings
?
Equipment
1,572,900
Income tax receivable
104,464
FV-NI investments...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- For this problem, carry at least four digits after the decimal in your calculations. Answers may...
- Why is it okay to speculate on Currency?
- What is the budgeting cycle and master budget? Why should companies use a master budget?
- please i need to have good answers and easy to understand This exercise refers to the...
- (1 point) Find y as a function of t if y′′+25y=0, y(0)=4,y′(0)=6. y= ?
- What are the six steps of hypothesis testing? What does it mean if we reject the...
- Consider the following network of a project consisting of 7 activities with a scheduled project duration...
ADVERTISEMENT