Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 31

At December 31, 2014, Westport Manufacturing Co.wned the following investments in the capital stock of publicly owned companies (all classified as available-for-sale securities):

In 2015, Westport engaged in the following two transactions:

At December 31, 2015, the market values of these stocks were: Lamb Computer, $40 per share; Dry Foods, $7.
Instructions
a.llustrate the presentation of marketable securities and the unrealized holding gain or loss in Westport's balance sheet at December 31, 2014.nclude a caption indicating the section of the balance sheet in which each of these accounts appears.
b.repare journal entries to record the transactions on April 6 and April 20.
c.rior to making a fair value adjustment at the end of 2015, determine the unadjusted balance in the Marketable Securities controlling account and the Unrealized Holding Gain (or Loss) on Investments account.Assume that no unrealized gains or losses have been recognized since last year.)
d.repare a schedule showing the cost and market values of securities owned at the end of 2015.Use the same format as the schedule illustrated above.)
e.repare the fair value adjusting entry required at December 31, 2015.
f.llustrate the presentation of the marketable securities and unrealized holding gain (or loss) in the balance sheet at December 31, 2015.Follow the same format as in part a.
g.llustrate the presentation of the net realized gains (or losses) in the 2015 income statement.ssume a multiple-step income statement and show the caption identifying the section in which this amount would appear.
h.xplain how both the realized and the unrealized gains and losses will affect the company's 2015 income tax return.