Question
In: Accounting
Exercise 17-7 On December 21, 2017, Riverbed Company provided you with the following information regarding its...
Exercise 17-7
On December 21, 2017, Riverbed Company provided you with the following information regarding its equity investments.
|
December 31, 2017 |
|||||||
|
Investments (Trading) |
Cost |
Fair Value |
Unrealized Gain (Loss) |
||||
| Clemson Corp. stock | $18,900 | $17,900 | $(1,000 | ) | |||
| Colorado Co. stock | 9,000 | 8,000 | (1,000 | ) | |||
| Buffaloes Co. stock | 18,900 | 19,540 | 640 | ||||
| Total of portfolio | $46,800 | $45,440 | (1,360 | ) | |||
| Previous fair value adjustment balance | 0 | ||||||
| Fair value adjustment—Cr. | $(1,360 | ) | |||||
During 2018, Colorado Company stock was sold for $8,550. The fair
value of the stock on December 31, 2018, was Clemson Corp.
stock—$18,010; Buffaloes Co. stock—$19,430. None of the equity
investments result in significant influence.
| (a) | Prepare the adjusting journal entry needed on December 31, 2017. | |
| (b) | Prepare the journal entry to record the sale of the Colorado Co. stock during 2018. | |
| (c) | Prepare the adjusting journal entry needed on December 31, 2018. |
Solutions
Expert Solution
Solution:
| Riverbed Company | |||
| No. | General Journal | Debit | Credit |
| a. | Unrealized Holding gain or loss Dr | $1,360 | |
| To Fair Value Adjustment | $1,360 | ||
| (To record Unrealized gain or loss at December 31, 2017) | |||
| b. | Cash Dr | $8,550 | |
| Loss on Sale of Investment | $450 | ||
| To Trading Investments | $9,000 | ||
| (To record sale of colorado stock during 2018) | |||
| c. | Fair Value Adjustment Dr (Note) | $1,000 | |
| To Unrealized Holding gain or loss | $1,000 | ||
| (To record Unrealized gain or loss at December 31, 2018) | |||
Note:
| Computation of Unrealized gain or loss on December 31, 2018 | |||
| Investment (Trading) | Cost | Fair Value at Dec 31 2018 | Unrealized holding Gain (Loss) |
| Clemson Corp. | 18900 | 18010 | -890 |
| Buffaloes co. | 18900 | 19430 | 530 |
| Total | -360 | ||
| Previous fair value adjustment balance | 1360 | ||
| Fair Value adjustment 2018 | 1000 | ||
ekkarill92 answered 7 months agoRelated Solutions
On December 21, 2017, Nash Company provided you with the following information regarding its equity investments....
On December 21, 2017, Nash Company provided you with the
following information regarding its equity investments. December
31, 2017 Investments (Trading) Cost Fair Value Unrealized Gain
(Loss) Clemson Corp. stock $19,900 $19,000 $(900 ) Colorado Co.
stock 10,100 9,100 (1,000 ) Buffaloes Co. stock 19,900 20,460 560
Total of portfolio $49,900 $48,560 (1,340 ) Previous fair value
adjustment balance 0 Fair value adjustment—Cr. $(1,340 ) During
2018, Colorado Company stock was sold for $9,590. The fair value of
the stock...
On December 21, 2020, Bridgeport Company provided you with the following information regarding its equity investments....
On December 21, 2020, Bridgeport Company provided you with the
following information regarding its equity investments.
Securities
Cost
Fair Value
Unrealized
Gain
(Loss)
SC Corp. stock
$39,100
34,980
$(4,120
)
True Co. stock
53,500
60,060
6,560
Plus, Inc. stock
30,400
30,124
(276
)
Total of portfolio
$123,000
$125,164
2,164
Previous fair value adjustment
balance
-0-
Fair value adjustment – Dr.
$2,164
During 2021, the Plus, Inc. stock was sold for $30,940. The fair
value of the stock on December 31,...
Celtics Pro Shop is a merchandiser that provided the following information regarding its 2017 NBA World...
Celtics Pro Shop is a merchandiser that provided the following
information regarding its 2017 NBA World Champion sweatshirts
:
AMOUNT:
Number of units sold . . . . . . . . . . . . . . . . . . . . . . .
. 40,000
Selling price per unit . . . . . . . . . . . . . . . . . . . . . .
. . $30.
Variable selling...
The records of Earthly Goods provided the following information for the year ended December 21 2020...
The records of Earthly Goods provided the following
information for the year ended December 21 2020
At Cost
At Retail
January 1 beginning inventory
$ 942,700
$ 1,854,300
Purchases
$ 6,657,660
$ 12,797,400
Purchase returns
$ 105,600
$ 238,700
Sales
$ 10,991,400
Sales Returns
$ 89,200
Required:
Prepare an estimate of the company's year end
inventory using the retail method.
Problem 23-2 The comparative balance sheets for Riverbed Corporation show the following information. December 31 2017...
Problem 23-2
The comparative balance sheets for Riverbed Corporation show the
following information.
December 31
2017
2016
Cash
$33,400
$12,900
Accounts receivable
12,200
10,000
Inventory
11,800
9,100
Available-for-sale debt investments
–0–
2,900
Buildings
–0–
29,800
Equipment
45,200
20,200
Patents
5,000
6,300
$107,600
$91,200
Allowance for doubtful accounts
$3,000
$4,600
Accumulated depreciation—equipment
2,000
4,500
Accumulated depreciation—building
–0–
5,900
Accounts payable
5,000
2,900
Dividends payable
–0–
4,900
Notes payable, short-term (nontrade)
3,000
4,000
Long-term notes payable
31,000
25,000
Common stock
43,000
33,000...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The
following information applies to the questions displayed below.]
The following transactions apply to Ozark Sales for 2018: The
business was started when the company received $48,500 from the
issue of common stock. Purchased equipment inventory of $177,500 on
account. Sold equipment for $193,500 cash (not including sales
tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $118,500. Provided a six-month...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The
following information applies to the questions displayed below.]
The following transactions apply to Ozark Sales for 2018: The
business was started when the company received $48,500 from the
issue of common stock. Purchased equipment inventory of $177,500 on
account. Sold equipment for $193,500 cash (not including sales
tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $118,500. Provided a six-month...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions...
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The
following information applies to the questions displayed below.]
The following transactions apply to Ozark Sales for 2018: The
business was started when the company received $48,500 from the
issue of common stock. Purchased equipment inventory of $177,500 on
account. Sold equipment for $193,500 cash (not including sales
tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $118,500. Provided a six-month...
Riverbed Company was formed on December 1, 2016. The following information is available from Riverbed’s inventory...
Riverbed Company was formed on December 1, 2016. The following
information is available from Riverbed’s inventory records for
Product BAP.
Units
Unit Cost
January 1, 2017 (beginning inventory)
732
$ 8.00
Purchases:
January 5, 2017
1,464
9.00
January 25, 2017
1,586
10.00
February 16, 2017
976
11.00
March 26, 2017
732
12.00
A physical inventory on March 31, 2017, shows 1,952 units on
hand.
Prepare schedule to compute the ending inventory at March 31,
2017, under FIFO inventory method.
Units...
3. At December 31, 2017, the following information was provided by the defined benefit pension plan...
3. At December 31, 2017, the following information was provided
by the defined benefit pension plan administrator for Leonardo
Corp.:
Fair value of plan
assets................................................
$5,000,000
Defined benefit
obligation............................................
6,200,000
The corporation uses IFRS. What is the net defined benefit
liability/asset account that should be shown on Leonardo’s December
31, 2017 statement of financial position?
4. Night Owl Inc. reports a taxable and pre-tax accounting loss
of $150,000 for 2017. The corporation's taxable and pre-tax
accounting income and...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe one of the three data transfer methodologies for cloud migration. Research online for a real-world...
- A study of college football games shows that the number of holding penalties assessed has a...
- What are the intermolecular forces involved with CO2?
- describe how the role of the A/E varies in the different approaches : traditional contract, Design...
- “Today, less than two decades after the arrival of the internet, Google and Facebook together command...
- Consider a project generating the following cash flows over six years: Year Cash Flow (R in...
- Please explain why it is important to determine early and late, start and finish schedules?
ADVERTISEMENT