Problem NO: 12

Fernandez Corp. invested its excess cash in available-for-sale securities during 2014. As of December 31, 2014, the portfolio of available-for-sale se

Fernandez Corp. invested its excess cash in available-for-sale securities during 2014. As of December 31, 2014, the portfolio of available-for-sale securities consisted of the following common stocks.

\r\n

Security Quantity Cost Fair Value Lindsay Jones, Inc. 1,000 shares $ 15,000 $ 21,000

\r\n

Poley Corp. 2,000 shares 40,000 42,000

\r\n

Arnold Aircraft 2,000 shares 72,000 60,000

\r\n

Totals $127,000 $123,000

\r\n

Instructions

\r\n

(a) What should be reported on Fernandez’s December 31, 2014, balance sheet relative to these securities?

\r\n

What should be reported on Fernandez’s 2014 income statement?

\r\n

On December 31, 2015, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks.

\r\n

Security Quantity Cost Fair Value

\r\n

Lindsay Jones, Inc. 1,000 shares $ 15,000 $20,000

\r\n

Lindsay Jones, Inc. 2,000 shares 33,000 40,000

\r\n

Duff Company 1,000 shares 16,000 12,000

\r\n

Arnold Aircraft 2,000 shares 72,000 22,000

\r\n

Totals $136,000 $94,000

\r\n

During the year 2015, Fernandez Corp. sold 2,000 shares of Poley Corp. for $38,200 and purchased 2,000 more shares of Lindsay Jones, Inc. and 1,000 shares of Duff Company.

\r\n

(b) What should be reported on Fernandez’s December 31, 2015, balance sheet? What should be reported on Fernandez’s 2015 income statement?

\r\n

On December 31, 2016, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks.

\r\n

Security Quantity Cost Fair Value

\r\n

Arnold Aircraft 2,000 shares $72,000 $82,000

\r\n

Duff Company 500 shares 8,000 6,000

\r\n

Totals $80,000 $88,000

\r\n

During the year 2016, Fernandez Corp. sold 3,000 shares of Lindsay Jones, Inc. for $39,900 and 500 shares of Duff Company at a loss of $2,700.

\r\n

(c) What should be reported on the face of Fernandez’s December 31, 2016, balance sheet? What should be reported on Fernandez’s 2016 income statement?

\r\n

(d) What would be reported in a statement of comprehensive income at (1) December 31, 2014, and

\r\n

(2) December 31, 2015?

0  reviews

Suggestions based on the Question and Answer that you are currently viewing

Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first

Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first quarter of the 2014–2015 fiscal year. Snider’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year. Sales revenue $60,000,000 Cost of goods sold 36,000,000 Variable selling expenses 1,000,000 Fixed selling expenses 3,000,000 Included in the fixed selling expenses was the single lump-sum payment of $2,000,000 for television advertisements for the entire year. Instructions (a) Snider Corporation must issue its quarterly financial statements in accordance with IFRS regarding interim financial reporting. (1) Explain whether Snider should report its operating results for the quarter as if the quarter were a separate reporting period in and of itself, or as if the quarter were an integral part of the annual reporting period. (2) State how the sales revenue, cost of goods sold, and fixed selling expenses would be reflected in Snider Corporation’s quarterly report prepared for the first quarter of the 2014–2015 fiscal year. Briefly justify your presentation. (b) What financial information, as a minimum, must Snider Corporation disclose to its shareholders in its quarterly reports?

(0)

The benefits of buying with AnswerDone:

Guaranteed quality through customer reviews

Access to High-Quality Documents

Our platform features a wide range of meticulously curated documents, from solved assignments and research papers to detailed study guides. Each document is reviewed to ensure it meets our high standards, giving you access to reliable and high-quality resources.

Quick and easy check-out

Easy and Secure Transactions

We prioritize your security. Our platform uses advanced encryption technology to protect your personal and financial information. Buying with AnswerDone means you can make transactions with confidence, knowing that your data is secure

Focus on what matters

Instant Access

Once you make a purchase, you’ll have immediate access to your documents. No waiting periods or delays—just instant delivery of the resources you need to succeed.

$1.49  0x  sold
    (0)
  Add to cart