All categories

3 years ago

Storm, Inc. purchased the following available-for-sale securities during 2016, its first year of operations:

Business

1 answer:

prisoha [69]3 years ago

5 0

Answer:

As per accounting standards available-for-sale securities are recorded at fair value through profit and loss account or other comprehensive income. We assume that company choose to record it at fair value through profit and loss account.

The answer of each requirement is given below.

a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, 2016

Loss on valuation $ 4,250

Investment Cost $ 4,250

Working

Dust Devil, Inc. = 40 * 1900 = 76,000 - 81,700 = -5,700

Gale Co. = 75 * 850 = 63,750 - 68,000 = -4,250

Whirlwind Co. = 42 * 2850 = 119,700 - 114,000 = 5,700

Profit/ (Loss) = (4,250)

b. Is there any impact of December 31, 2016 journal entry on the income statement

The company income for the year will be reduced by ($ 4,250).

You might be interested in

In microeconomics, the term ___________________ is synonymous with decreasing returns of scale.

allsm [11]

In microeconomics, the term monopoly is synonymous with decreasing returns of scale.

When there are economies of scale in production?

As output increases, the long-run average total cost decreases. The total variable cost of creating five units of output is indicated by the Y-interval between the two curves in the diagram.

Is price and marginal cost equal?

In economics, the practice of setting a product's price to cover the additional expense of producing an additional unit of output is known as marginal cost pricing.
This policy limits the producer's ability to charge for each unit of a product sold to the addition to total cost attributable to materials and direct labor.

Simply put, what is microeconomics?

Microeconomics is the study of how people, households, and businesses make decisions and distribute resources.
It generally pertains to markets for goods and services and addresses both personal and financial concerns.

Learn more about microeconomics

brainly.com/question/8102286

#SPJ4

4 0

2 years ago

El Toro Corporation declared a common stock distribution to all shareholders of record on June 30, 20X3. Shareholders will recei

Natasha2012 [34]

Answer:

This distribution is not taxable since Raoul is not earning any money at all (dividend income = $0), but the tax basis on the stocks that he holds will vary.

Before the distribution, Raoul had 310 shares, each share with a $60 tax basis. After the distribution, Raoul will have 465 shares, each share with a $40 tax basis.

7 0

3 years ago

Depreciation--Jerry Company purchased machinery for $315,000 on May 1,2020 . It is estimated that it will have an useful life of

Gemiola [76]

Answer:

The depreciation for the first year is $75,000

Explanation:

In working hours method the depreciation on a fixed asset is charged using the ratio of numbers of hours utilized by the asset in a period and lifetime working capacity in hours.

First, we need to calculate the Depreciable value

Depreciable value = Cost of Asset - Salvage value = $315,000 - $15,000 = $300,000

Depreciation = Depreciable value x Numbers of hours worked / Total working capacity of Asset = $300,000 x 25,000 / 100,000 = $75,000

6 0

3 years ago

After enrolling in the MBA program at Minor State University, Sheri began having second thoughts. Although MSU seemed to be a go

NARA [144]

Answer:

Option D

Explanation:

In simple words, Cognitive dissonance refers to the practical contact of mental stress that arises whenever an individual holds two or more contradictory beliefs, ideas, values or takes part in a behavior contrary to some of these three.

As per this concept, when two acts or thoughts do not coincide mentally with each other, individuals will do everything they can to alter these until they become compatible.

Thus, from the above we can conclude that the correct option is D .

6 0

3 years ago

Unlike consumer credit, trade credit does not involve the use of a

hammer [34]

Answer:

Trade credit means many things but the simplest definition is an arrangement to buy goods and/or services on account without making immediate cash or check payments. Trade credit is a helpful tool for growing businesses, when favorable terms are agreed with a business's supplier.

Explanation:

Trade credit allows businesses to receive goods or services in exchange for a promise to pay the supplier within a set amount of time. New businesses often have trouble securing financing from traditional lenders; buying inventory, for example, on trade credit helps increase their purchasing power.

3 0

2 years ago