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The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets: Investment...
The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets: Investment in IBM common shares $ 1,445,000 Less: Fair value adjustment (155,000 ) $ 1,290,000 No changes occurred during 2018 in the investment portfolio. Required: Prepare appropriate adjusting entry(s) at December 31, 2018, assuming the fair value of the IBM common shares was: $1,199,000 $1,299,000 $1,460,000
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Expert Solution
| Part-1 | ||
| Adjusting Entry | ||
| Account Tittle | Debit | Credit |
| Accumulated Unrealized holding Losses and Gains | $91000 | |
| Fair Value Adjustment | $91000 |
| Working Note-1 |
| Loss during Fair value Adjustment = Fair Value – Investment |
| = $1,1,99,000 - $ 1,445,000=$246000 |
| Reserve Available= $155000 |
| Additional Reserve required (246000-155000)=$91000 |
| Part-2 | ||
| Adjusting Entry | ||
| Account Tittle | Debit | Credit |
| Fair Value Adjustment | $9000 | |
| Accumulated Unrealized holding Losses and Gains | $9000 |
| Working Note-2 |
| Loss during Fair value Adjustment = Fair Value – Investment |
| = $1,2,99,000 - $ 1,445,000=$146000 |
| Reserve Available= $155000 |
| Existing Reserve Reduced by (155000-146000)=$9000 |
| Part-3 | ||
| Adjusting Entry | ||
| Account Tittle | Debit | Credit |
| Fair Value Adjustment | 170000 | |
| Accumulated Unrealized holding Losses and Gains | 170000 |
| Working Note-3 |
| Loss during Fair value Adjustment = Fair Value – Investment |
| = $1,4,60,000 - $ 1,445,000=$15000 |
| Reserve Available= $155000 |
| Unrealized Profit should be record (155000+15000)=$170000 |
ekkarill92 answered 2 years agoRelated Solutions
The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets: Investment...
The accounting records of Jamaican Importers, Inc., at January
1, 2018, included the following:
Assets:
Investment in IBM common
shares
$
1,395,000
Less: Fair value adjustment
(150,000
)
$
1,245,000
No changes occurred during 2018 in the investment portfolio.
Required:
Prepare appropriate adjusting entry(s) at December 31, 2018,
assuming the fair value of the IBM common shares was:
$1,187,000
$1,287,000
$1,425,000
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account
field.)
8. The accounting records of Jamaican Importers, Inc., at January 1, 2018, included the following: Assets...
8. The accounting records of Jamaican Importers, Inc., at
January 1, 2018, included the following:
Assets Investment in IBM common shares $1,895,000 Less: Fair
value adjustment (200,000) ____________ $1,695,000
No changes occurred during 2018 in the investment
portifolio.
Required: Prepare appropriate adjusting entry(s) at
December 31, 2018, assuming the fair value of the IBM common shares
was
1. $1,331,000 2. $1,770,000 3. $1,920,000
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account...
On January 1, 2018, the following information was drawn from the accounting records of Carter Company:...
On January 1, 2018, the following information was drawn from the
accounting records of Carter Company: cash of $225; land of $1,875;
notes payable of $525; and common stock of $945. Required a.
Determine the amount of retained earnings as of January 1, 2018. b.
After looking at the amount of retained earnings, the chief
executive officer (CEO) wants to pay a $325 cash dividend to the
stockholders. Can the company pay this dividend? c. As of January
1, 2018,...
The accounting records of Wall’s China Shop reflected the following balances as of January 1, 2018:...
The accounting records of Wall’s China Shop reflected the
following balances as of January 1, 2018:
Cash
$
17,700
Beginning inventory
19,110
(210 units @ $91)
Common stock
15,500
Retained earnings
21,310
The following five transactions occurred in 2018:
First purchase (cash) 120 units @ $93
Second purchase (cash) 195 units @ $101
Sales (all cash) 360 units @ $192
Paid $14,450 cash for salaries expense
Paid cash for income tax at the rate of 25 percent of income
before...
On January 1, 2018, the following information was drawn from the accounting records of Carter Company:...
On January 1, 2018, the following information was drawn from the
accounting records of Carter Company: cash of $400; land of $2,400;
notes payable of $700; and common stock of $1,540.
Required
a. Determine the amount of retained earnings as
of January 1, 2018.
b. After looking at the amount of retained
earnings, the chief executive officer (CEO) wants to pay a $500
cash dividend to the stockholders. Can the company pay this
dividend?
c. As of January 1, 2018,...
The accounting records of Wall’s China Shop reflected the following balances as of January 1, 2018:...
The accounting records of Wall’s China Shop reflected the
following balances as of January 1, 2018: Cash $ 17,600 Beginning
inventory 18,200 (200 units @ $91) Common stock 15,400 Retained
earnings 20,400 The following five transactions occurred in 2018:
First purchase (cash) 120 units @ $93 Second purchase (cash) 200
units @ $101 Sales (all cash) 350 units @ $199 Paid $16,950 cash
for salaries expense Paid cash for income tax at the rate of 25
percent of income before...
The accounting records of Wall’s China Shop reflected the following balances as of January 1, 2018:...
The accounting records of Wall’s China Shop reflected the
following balances as of January 1, 2018: Cash $ 17,600 Beginning
inventory 18,400 (200 units @ $92) Common stock 14,500 Retained
earnings 21,500 The following five transactions occurred in 2018:
First purchase (cash) 125 units @ $94 Second purchase (cash) 195
units @ $102 Sales (all cash) 355 units @ $190 Paid $15,700 cash
for salaries expense Paid cash for income tax at the rate of 25
percent of income before...
On January 1, 2018, the following information was drawn from the accounting records of Carter Company:...
On January 1, 2018, the following information was drawn from the
accounting records of Carter Company: cash of $800; land of $3,500;
notes payable of $600; and common stock of $1,000.
Required
a. Determine the amount of retained earnings as
of January 1, 2018.
b. After looking at the amount of retained
earnings, the chief executive officer (CEO) wants to pay a $1,000
cash dividend to the stockholders. Can the company pay this
dividend?
c. As of January 1, 2018,...
Waddell Company had the following balances in its accounting records as of December 31, 2018: Assets...
Waddell Company had the following balances in its accounting
records as of December 31, 2018:
Assets
Liabilities and Equity
Cash
$
54,000
Accounts Payable
$
23,000
Accounts Receivable
44,000
Common Stock
88,000
Land
31,000
Retained Earnings
18,000
Totals
$
129,000
$
129,000
The following accounting events apply to Waddell Company’s 2019
fiscal year:
Jan.
1
Acquired $52,000 cash from the issue of common stock.
Feb.
1
Paid $5,400 cash in advance for a one-year lease for office
space.
Mar.
1...
The following information was obtained from the accounting records and financial statements of Palmer Inc. Assets...
The following information was obtained from the accounting
records and financial statements of Palmer Inc.
Assets
2019
2020
∆
Cash
$ 280,000
315,000
35,000
Accounts receivable
720,000
755,000
35,000
Inventory
855,000
800,000
(55,000)
Capital assets
1,720,000
1,930,000
210,000
Accumulated depreciation
(580,000)
(550,000)
30,000
Net capital assets
1,140,000
1,380,000
240,000
Total
2,995,000
3,250,000
Liabilities and Stockholders’ equity
Accounts payable
445,000
360,000
(85,000)
Interest payable
60,000
75,000
15,000
Income taxes payable
40,000
50,000
10,000
Bonds payable
800,000
900,000
100,000
Common stocks
1,200,000...
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