Mon Chapter 156 Help Save&Exit; Submit Mequireca (The following information appl

Question

Mon Chapter 156 Help Save&Exit; Submit Mequireca (The following information apples to the questions displayed below Stoll Co.'s long-term available-for-sale portfolio at December 31, 206, consists of the following 60,000 shares of Company A comon stock 39,000 ahares of C aer c comon stock 378,000 1,326,875 Stoll enters into the following long-term investment transactions during year 2017 Jan. 2, seld 19,000.shares-ot conpany eomn stock fortin,,ni brokerage fee ot S.000; Ape. 17 Purchased 22,000 shares of Conpany conson stock for 470,000 plus a brokerage foe ot 53,630. The July Purchased 13,000 shres of conpany x common atock for 260,525 plus a brokerage fee of 3, 600. The Aug, 22 Purchased 100,000 shares of Company common stook for 649, 00 plusa brokerage tee ot s8,400 Now. 13 Purchased 17,000 shares of coepany conmon stock Eo $526,30 plua a beokerage fee of 6,40. The Dec. 9 Sold 10,000 .hares as company A comon·toek tor S,030.000 less brokerage tee of S,100. The fair values of its investments at December 31, 2017, are: B. $170.250 C$1228125, W$390,000, x, $243750: Y shares represent a 30% ownership in company The shares represent shares represont à 5% (wnership i Company I $1,070,000, and Z, 565.100

Explanation / Answer

Answer:3 Only gains or losses realized on the sale of available ­for­sale securities appear on the 2017 income statement. Unrealized gains or losses appear in the equity section of the balance sheet.

Year 2017 realized gains (losses):

31 Dec

Fair value adjustment-AFS A/C Dr. $46600

To Owners equity $46600

Stock Sold Cost Sale Gain(Loss) 19000 shares of Company B stock (348750/38000)*19000=174375 174375 173375-3000=170375 170375 -4000 40,000 shares of Company A stock (1044600/60000)*60000 1044600 1030000-4100=1025900 1025900 -18700 Realized Gain (loss) -22700

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