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In: Accounting

Problem 3 The Griffin Corporation’s investments in equity securities at December 31, 20x4 is as follows:...

Problem 3

The Griffin Corporation’s investments in equity securities at December 31, 20x4 is as follows:

Original Cost Carrying Value Fair Value

Chris Co. $ 360,000 $ 230,000 $ 310,000

Stewie Inc. 200,000 270,000 260,000

Lois Company 450,000 630,000 700,000

$1,010,000 $1,130,000 $1,270,000

Transactions during the 20x5 year:

1. Sold Stewie for $250,000 less brokerage fees of $4,000.

2. Sold Lois for $750,000 less brokerage fees of $9,000.

3. Purchased Brian Inc. for $380,000 plus brokerage fees of $6,000.

Fair values at December 31, 20x5:

Chris Co. - $325,000

Brian Inc, - $362,000

Required –

Prepare all journal entries for December 31, 20x4 through December 31, 20x5 on the assumption that the securities are classified as…

a. FVPTL

b. FVTOCI. The net income for the year is $600,000. Prepare the bottom part of the statement of comprehensive income. Reconcile the opening balance in the A*OCI account to the ending balance.

Expert Solution

ekkarill92 answered 1 year ago

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