Question 5 On March 1,2016 lingle Bels Corp, purchased 2,000 shares of Winter Wo

Question

Question 5 On March 1,2016 lingle Bels Corp, purchased 2,000 shares of Winter Wonderland Wholesale for 45 per share Jingle Bells Corp. classifies the investment as available-for-sale. On December 31, 2016 the shares of Winter Wonderland Wholesale had a current market value of $40 per share. What amount of realized gain or loss would Jingle Bells Corp. report on its 2017 income statement if Bells Corp, sells the 2,000 shares of Winter Wonderland Wholesale on July 1, 2017 for $42 per share? 6000 gain $10000 loss 4,000 loss $6,000 loss 54,000 gain

Explanation / Answer

Realized loss = (45-42) * 2,000 = 6,000

JOURNAL ENTRIES

Date Particulars Debit Credit March 1, 2016 Investment (AFS securities) 90,000 Cash 90,000

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