61.Unrealized holding gains and losses securities available for sale would : 1412829
61.Unrealized holding gains and losses on securities available for sale would have the following effects on accumulated other comprehensive income:
62.In the statement of cash flows, inflows and outflows of cash from buying and selling available for sale securities are considered:
D.Noncash financing activities.
63.Unrealized holding gains and losses on securities available for sale would have the following effects on retained earnings:
c.No changeNo change
64.Zwick Company bought 28,000 shares of the voting common stock of Handy Corporation in January 2016. In December, Handy announced $200,000 net income for 2016 and declared and paid a cash dividend of $2 per share on the 200,000 shares of outstanding common stock. Zwick Company's dividend revenue from Handy Corporation in December 2016 would be:
D.None of these answer choices is correct.
Ownership share = 28,000/200,000 = 14%, so neither the equity method nor consolidation is appropriate.
28,000 shares × $2.00 per share = $56,000
65.On January 2, 2015, Howdy Doody Corporation purchased 12% of Ranger Corporation's common stock for $50,000 and classified the investment as available for sale. Ranger's net income for the years ended December 31, 2015 and 2016, were $10,000 and $50,000, respectively. During 2016, Ranger declared and paid a dividend of $60,000. There were no dividends in 2015. On December 31, 2015, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. How much should Howdy Doody show in the 2016 income statement as income from this investment?
Investment revenue from dividends:
$60,000 × 12% = $7,200
Any change in fair value during 2016 would be reflected in shareholders' equity but would not affect net income.
66.Jeremiah Corporation purchased securities during 2016 and classified them as securities available for sale:
All declines are considered to be temporary. How much gain will be reported by Jeremiah Corporation in the December 31, 2016, income statement relative to the portfolio?
D.None of these answer choices is correct.
Unrealized gains and losses are not included in earnings for securities available for sale.
67.Hawk Corporation purchased 10,000 shares of Diamond Corporation stock in 2013 for $50 per share and classified the investment as securities available for sale. Diamond's market value was $60 per share on December 31, 2014, and $65 on December 31, 2015. During 2016, Hawk sold all of its Diamond stock at $70 per share. In its 2016 income statement, Hawk would report:
A.A gain of $50,000.
B.A gain of $150,000.
C.A gain of $200,000.
D.A gain of $300,000.
In 2013-2015, Hawk accumulated an unrealized gain and fair value adjustment of ($65 - 50) × 10,000 shares = $150,000. An additional increase of $50,000 occurred in 2016, so the total gain realized in the income statement would be $200,000.
68.Dim Corporation purchased 1,000 shares of Witt Corporation stock in 2013 for $800 per share and classified the investment as securities available for sale. Witt's market value was $400 per share on December 31, 2014, and $300 on December 31, 2015. During 2016, Dim sold all of its Witt stock at $350 per share. In its 2016 income statement, Dim would report:
A.A realized gain of $50,000.
B.A recognition of unrealized losses of $400,000.
C.A loss on the sale of investments of $450,000.
D.A trading gain of $50,000 and an unrealized loss of $500,000.
Loss on sale of investments450,000
Investment in Witt800,000
69.On January 1, 2016, Everglade Company purchased the following securities and properly accounted for them as securities available for sale:
SecurityCostFair value on 12/31/2016
All declines in value are considered temporary. What amount should the Everglade Company report relative to these securities in its 2016 statement of other comprehensive income?
B.$19,000 unrealized gain.
C.$12,000 net unrealized gain.
D.$7,000 unrealized loss.
Unrealized gains and losses on securities available for sale do not affect income.
70.Boulter, Inc. began business on January 1, 2016. At the end of December 2016, Boulter had the following investments in equity securities:
TradingAvailable for Sale
All declines in value are deemed to be temporary in nature. How should the corresponding losses be reflected in the financial statements at December 31, 2016?
Income StatementAccumulated Other Comprehensive Income in
Unrealized loss on trading securities is included in income: $60,000 - $54,000 = $6,000
Unrealized loss on securities available for sale is reported as a separate component of shareholders' equity: $110,000 - $107,500 = $2,500