© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
c. The fair value of the forward currency contract on June 30,
d. June 30, 2014
Equipment
……………………………………………………….
50,980
e. June 30, 2014
13-13Solutions
13.22 (Biddle Corporation; accounting for forward currency contract as
a cash flow hedge.) (amounts in US$)
a. The amount that Biddle Corporation would receive if the
c. The fair value of the forward contract on March 31, 2014, just
receive from the counterparty, which is $3,200 (= $56,000 –
d. March 31, 2014
Note Payable ……………………………………………………
e. March 31, 2014
Ca
sh
………………………………………………………………..
The carrying value of the equipment before recognizing any
depreciation is $52,800. The net cash outflow is $52,800 (=
$56,000 –
$3,200). The gains in Accumulated Other Comprehensive
Income from
revaluing the forward contract of $3,200 exactly offset the
losses from revaluing the Note Payable of $3,200. Thus, Biddle
Corporation could make an entry clearing these amounts from
Accumulated Other Comprehensive Income.
13.23 (Dostal Corporation; journal entries and financial statement
presentation of short-term available-for-sale securities.) (amounts
in US$)
a. 2/05/2013
Marketable Securities (Security A)…………………….
8/12/20
13
Marketable Securities (Security B)…………………….
Solutions13-14
Unrealized Loss on Security B (Other
1/22/2014
2/25/2014
3/25/2014
6/05/2014
Ca
sh
……………………………………………………………….. 72,000
Unrealized Gain on Security A (Accumulated
6/05/2014
Ca
sh
……………………………………………………………….. 39,000
Realized Loss on Sale of Available-for-Sale
13-15Solutions
Unrealized Loss on Security C
(Other
12/31/20
14
Marketable Securities (Security E) (=
b. Balance Sheet on December 31,
2013
Marketable Securities at Fair Va
lu
e …………………………….. $
Net Unrealized Gain on Available- for-Sale
Securities
Not
e
Marketable Securities on December 31, 2013, had an
acquisition cost of $85,000 and a fair value of $86,000. Gross
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
c. Balance Sheet on December 31,
2014
Marketable Securities at Fair Va
lu
e …………………………….. $
Not
e
Marketable Securities on December 31, 2014, had an
changed
as follows during
2014:
Balance, December 31, 2013 …………………………………….. $
Dr. Change in Net Unrealized Loss on Securities Held at
Solutions13-16
13.24 (Rice Corporation; journal entries and financial statement
presentation of long-term available-for-sale securities.) (amounts in
US$)
a. 3/05/2013
5/12/2013
12/31/2013
Unrealized Gain on Security A (Other
12/31/2013
Unrealized Loss on Security B (Other
3/22/2014
5/25/2014
5/25/2014
10/05/2014
Ca
sh
……………………………………………………………….. 52,000
Unrealized Gain on Security A (Accumulated
13-17Solutions
13.24 a. continued.
10/05/20
14
Ca
sh
………………………………………………………………..
16,000
Realized Loss on Sale of
Available-for-Sale
12/31/20
14
Investments in Securities (Security B) (=
12/31/20
14
Unrealized Loss on Security C
(Other
12/31/20
14
Investments in Securities (Security E) (=
$67,000
b. Balance Sheet on December 31,
2013
Investments in Securities at Fair Value………………………… $
Net Unrealized Loss on Available-for-Sale
Not
e
Investments in Securities on December 31, 2013, had an
Solutions13-18
13.24 continued.
c. Balance Sheet on December 31, 2014
Investments in Securities at Fair Value………………………… $
Not
e
Investments in Securities on December 31, 2014, had an
$5,000. Proceeds from sales of investments in securities
totaled
13.25 (Moonlight Mining Company; analysis of financial statement
disclosures for available-for-sale securities.) (amounts in thousands
of US$)
d. None. The unrealized loss on current marketable securities of
balance sheet
13-19Solutions
13.26 (Callahan Corporation; effect of various methods of
accounting for marketable equity securities.) (amounts in US$)
a. Trading
Securities
Income
Statement:
2013 2014
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Balance Sheet:
Current
Assets:
b. Available-for-Sale Securities (Current
Asset)
Income Statement:
2013 2014
Dividend Revenue……………………………………. $
Balance Sheet:
Current Assets:
Marketable Securities at Fair Value…….. $54,000 $
………………………….
($17,000 – $12,000)
………………………….
—
5,00
0
c. Same as Part b. except that the securities appear as
Investments in
Securities in the noncurrent assets section of the balance sheet.
Solutions13-20
d.
Trading
A
v a
i
l
a b
l
e-
fo r –
S a
l
e
S
e
c
u
r
i
t
i
e
s
Securities
Current
Assets Noncurrent
Assets
201
201
………………………
201
………………………
………………………
$ 2,300 $ 3,300 $ 3,300
13.27 (Analysis of financial statement disclosures related to
marketable securities and quality of earnings.) (amounts in
millions of US$)
0
Realized Loss on Sale of
Available-for-Sale
3
Marketable Securities ……………………………….
Marketable Securities ………………………………………
262
Unrealized Loss on Available-for-Sale
26
2
b. Balance, December 31, 2013 (= $957 – $510)
$ 447 Cr.
13-21olutions
c. Interest and Dividend Revenue ………………………………… $
1,081
Net Realized Gain on Securities Sold from Market
Price Changes Occurring during 2014:
51
8
Total Income …………………………………………………………… $
2
,19
1
d. The bank sold marketable securities during 2014, which had
net unrealized losses of $262 million as of December 31, 2014.
The sale of these securities at a gain suggests that the
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
c. The fair value of the forward currency contract on June 30,
d. June 30, 2014
Equipment
……………………………………………………….
50,980
e. June 30, 2014
13-13Solutions
13.22 (Biddle Corporation; accounting for forward currency contract as
a cash flow hedge.) (amounts in US$)
a. The amount that Biddle Corporation would receive if the
c. The fair value of the forward contract on March 31, 2014, just
receive from the counterparty, which is $3,200 (= $56,000 –
d. March 31, 2014
Note Payable ……………………………………………………
e. March 31, 2014
Ca
sh
………………………………………………………………..
The carrying value of the equipment before recognizing any
depreciation is $52,800. The net cash outflow is $52,800 (=
$56,000 –
$3,200). The gains in Accumulated Other Comprehensive
Income from
revaluing the forward contract of $3,200 exactly offset the
losses from revaluing the Note Payable of $3,200. Thus, Biddle
Corporation could make an entry clearing these amounts from
Accumulated Other Comprehensive Income.
13.23 (Dostal Corporation; journal entries and financial statement
presentation of short-term available-for-sale securities.) (amounts
in US$)
a. 2/05/2013
Marketable Securities (Security A)…………………….
8/12/20
13
Marketable Securities (Security B)…………………….
Solutions13-14
Unrealized Loss on Security B (Other
1/22/2014
2/25/2014
3/25/2014
6/05/2014
Ca
sh
……………………………………………………………….. 72,000
Unrealized Gain on Security A (Accumulated
6/05/2014
Ca
sh
……………………………………………………………….. 39,000
Realized Loss on Sale of Available-for-Sale
13-15Solutions
Unrealized Loss on Security C
(Other
12/31/20
14
Marketable Securities (Security E) (=
b. Balance Sheet on December 31,
2013
Marketable Securities at Fair Va
lu
e …………………………….. $
Net Unrealized Gain on Available- for-Sale
Securities
Not
e
Marketable Securities on December 31, 2013, had an
acquisition cost of $85,000 and a fair value of $86,000. Gross
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
c. Balance Sheet on December 31,
2014
Marketable Securities at Fair Va
lu
e …………………………….. $
Not
e
Marketable Securities on December 31, 2014, had an
changed
as follows during
2014:
Balance, December 31, 2013 …………………………………….. $
Dr. Change in Net Unrealized Loss on Securities Held at
Solutions13-16
13.24 (Rice Corporation; journal entries and financial statement
presentation of long-term available-for-sale securities.) (amounts in
US$)
a. 3/05/2013
5/12/2013
12/31/2013
Unrealized Gain on Security A (Other
12/31/2013
Unrealized Loss on Security B (Other
3/22/2014
5/25/2014
5/25/2014
10/05/2014
Ca
sh
……………………………………………………………….. 52,000
Unrealized Gain on Security A (Accumulated
13-17Solutions
13.24 a. continued.
10/05/20
14
Ca
sh
………………………………………………………………..
16,000
Realized Loss on Sale of
Available-for-Sale
12/31/20
14
Investments in Securities (Security B) (=
12/31/20
14
Unrealized Loss on Security C
(Other
12/31/20
14
Investments in Securities (Security E) (=
$67,000
b. Balance Sheet on December 31,
2013
Investments in Securities at Fair Value………………………… $
Net Unrealized Loss on Available-for-Sale
Not
e
Investments in Securities on December 31, 2013, had an
Solutions13-18
13.24 continued.
c. Balance Sheet on December 31, 2014
Investments in Securities at Fair Value………………………… $
Not
e
Investments in Securities on December 31, 2014, had an
$5,000. Proceeds from sales of investments in securities
totaled
13.25 (Moonlight Mining Company; analysis of financial statement
disclosures for available-for-sale securities.) (amounts in thousands
of US$)
d. None. The unrealized loss on current marketable securities of
balance sheet
13-19Solutions
13.26 (Callahan Corporation; effect of various methods of
accounting for marketable equity securities.) (amounts in US$)
a. Trading
Securities
Income
Statement:
2013 2014
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Balance Sheet:
Current
Assets:
b. Available-for-Sale Securities (Current
Asset)
Income Statement:
2013 2014
Dividend Revenue……………………………………. $
Balance Sheet:
Current Assets:
Marketable Securities at Fair Value…….. $54,000 $
………………………….
($17,000 – $12,000)
………………………….
—
5,00
0
c. Same as Part b. except that the securities appear as
Investments in
Securities in the noncurrent assets section of the balance sheet.
Solutions13-20
d.
Trading
A
v a
i
l
a b
l
e-
fo r –
S a
l
e
S
e
c
u
r
i
t
i
e
s
Securities
Current
Assets Noncurrent
Assets
201
………………………
$ 2,300 $ 3,300 $ 3,300
13.27 (Analysis of financial statement disclosures related to
marketable securities and quality of earnings.) (amounts in
millions of US$)
0
Realized Loss on Sale of
Available-for-Sale
3
Marketable Securities ……………………………….
Marketable Securities ………………………………………
262
Unrealized Loss on Available-for-Sale
26
2
b. Balance, December 31, 2013 (= $957 – $510)
$ 447 Cr.
13-21olutions
c. Interest and Dividend Revenue ………………………………… $
1,081
Net Realized Gain on Securities Sold from Market
Price Changes Occurring during 2014:
51
8
Total Income …………………………………………………………… $
2
,19
1
d. The bank sold marketable securities during 2014, which had
net unrealized losses of $262 million as of December 31, 2014.
The sale of these securities at a gain suggests that the