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Sunday, November 14, 2010

Valix Finacc vol 1 Problem 12-6

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 12-6


2008
July    1   Trading securities                                                                 2,200,000
              Commission expense                                                                          50,000
              Interest income (2,000,000 x 4%)                                              80,000
                     Cash                                                                                                     2,330,000                       
Dec. 31  Unrealized loss – TS                                                                 300,000
                     Trading securities                                                                                                300,000                        
               Market value (2,000,000 x 95)                                                                      1,900,000
               Carrying amount                                                                                        2,200,000
               Unrealized loss                                                                                               300,000
    
          31  Cash (2,000,000) x 8%)                                                          160,000
                      Interest income                                                                                     160,000

2009                                                                                                    
March 31   Cash                                                                                2,140,000                       
                        Trading securities                                                                               1,900,000
                        Gain on sale of TS                                                                                200,000
                        Interest income (2,000,000 x 8%) x 3/12)                                                 40,000

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