Alternate Exercises and Problems 12–1
Exercise 12-1
Requirement 1
2016
March 1
($ in millions)
Investment in Platinum Gems, Inc. shares …………………………... 124
Cash …………………………………………………………………………….. 124
April 13
July 20
October 13
October 14
November 1
12–2 Intermediate Accounting, 8/e
Exercise 12-1 (continued)
December 31, 2016
($ in millions) Unrealized
Available-for-Sale Securities Cost Fair Value Gain (Loss)
Platinum Gems, Inc. shares $124 $128* $4
2017
January 23
($ in millions)
Cash ([2 million shares x 1/2] x $65) …………………………………………. 65
Alternate Exercises and Problems 12–3
December 31, 2016
($ in millions) Unrealized
Available-for-Sale Securities Cost Fair Value Gain (Loss)
Platinum Gems, Inc. shares $ 62* $ 65** $3
Less 12/31/09 balance $1
Total adjustment needed $2
Requirement 2
2016 Income Statement
($ in millions)
Investment revenue (from July 20; Oct. 13) …………………………. $13
12–4 Intermediate Accounting, 8/e
Exercise 12-2
1. Investments reported as current assets.
Security A $ 725,000
2. Investments reported as noncurrent assets.
3. Unrealized gain (or loss) component of income before taxes.
Trading Securities:
4. Unrealized gain (or loss) component of other comprehensive income.
Securities Available For Sale:
Alternate Exercises and Problems 12–5
Exercise 12-3
Purchase ($ in millions)
Investment in Reed’s Restaurant Supplies shares ………………. 73
12–6 Intermediate Accounting, 8/e
Exercise 12-4
Purchase ($ in millions)
Investment in Conley Trucks ……………………………………….. 76
Cash …………………………..…………………………………………. 76
Net income
Alternate Exercises and Problems 12–7
Problem 12-1
Requirement 1
Purchase ($ in 000s)
Investment in Austin shares…………………………………………………. 648
Cash …………………………………………………………………………….. 648
PROBLEMS
12–8 Intermediate Accounting, 8/e
Problem 12-1 (concluded)
Requirement 2
Purchase ($ in 000s)
Investment in Austin shares …………………………………………………. 648
Alternate Exercises and Problems 12–9
Problem 12-2
Requirement 1
Purchase ($ in millions)
Investment in Monterrey shares ……………………………………………. 80.0
Cash …………………………………………………………………………….. 80.0
‡Calculations:
Investee Net Assets Difference
Net Assets Purchased Attributed to:
12–10 Intermediate Accounting, 8/e
Problem 12-2 (concluded)
Requirement 2
Investment Revenue
($ in millions)
11.2 Share of income
Inventory .4
Requirement 3
Investment in Monterrey shares
($ in millions)
Requirement 4