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912
Problem 15-3B (Continued)
2018
Apr. 26
Cash ..........................................................................................
50,043
Loss on Sale of Investments ................................
7,240
Nov. 27
Cash .........................................................................................
29,755
913
Problem 15-3B (Continued)
2019
Sept. 3
Long-Term Investments—AFS (Motorola) ...............................
84,780
Oct. 31
Cash .........................................................................................
26,102
914
Problem 15-3B (Concluded)
Part 2
12/31/2017
12/31/2018
12/31/2019
Part 3
2017
2018
2019
Realized gains (losses)
915
Problem 15-4B (50 minutes)
Part 1
1. Journal entries (assuming significant influence)
2017
916
Problem 15-4B (Continued)
2. Carrying value per share (see computations in part 1)
3. Change in Brinkley’s equity
Part 2
1. Journal entries (assuming NO significant influence)
2017
Jan. 5
Long-Term Investments—AFS (Bloch) ................................
200,500
917
Problem 15-4B (Concluded)
2018
2019
Jan. 8
Cash ..........................................................................................
375,000
2. Investment cost per share, January 7, 2019
3. Change in Brinkley's equity
Dividend Revenue (for 2017) ..............................
$ 21,000
918
Problem 15-5B (40 minutes)
Part 1
Available-for-sale securities on December 31, 2017
Security
Cost
Fair Value
27,500 shares of Company R common stock .............
$559,125
$568,125
Disclosure
Part 2
Dec. 31
Unrealized Loss⎯Equity ........................................................
16,267
Part 3
Only gains or losses realized on the sale of available-for-sale securities
919
Serial Problem — SP 15
Serial Problem, Business Solutions (35 minutes)
Part 1
2018
Part 2 Adjusting entry at June 30, 2018
Reporting in Action — BTN 15-1
2. Apple’s other comprehensive income (loss) for the year ended
Other comprehensive income (loss):
3. Yes. Its consolidated statement of comprehensive income does include
4. Return on total assets for the year ended September 26, 2015, ($
millions) follows:
5. Answer depends on the annual report information obtained.
921
Comparative Analysis — BTN 15-2
1. Apple’s return on total assets
2. Return on total assets = Profit margin x Total asset turnover
—— Returns in part 2 can differ from those in part 1 due to rounding ——
Apple’s component analysis of return on total assets*
Current Year
Google’s component analysis of return on total assets*
922
Comparative Analysis (Concluded)
3. Current Year Analysis: Apple has the higher return on total assets
One Year Prior Analysis: Apple has the higher return on total assets
923
Ethics Challenge — BTN 15-3
1. Kasey’s bonus is not contingent on the classification of available-for-
sale versus held-to-maturity. Designation of the bonds as available-for-
2. Generally, Kasey must classify its debt securities as either short or long
term and as available-for-sale or held-to-maturity. Since the bonds are
Communicating in Practice — BTN 15-4
TO: Mary Jolee
FROM: (Your Name)
SUBJECT: Sale of Kemper Common Stock
The $6,000 loss on the sale of Kemper common stock is correctly stated.
Jolee Company owned 40% of the outstanding shares, and therefore
accounts for the investment according to the equity method. Under the
Taking It to the Net — BTN 15-5
($ millions for Parts 1 through 4)
925
Teamwork in Action — BTN 15-6
Entrepreneurial Decision — BTN 15-7
1.
Jan. 1
Long-Term Investments—Sustain*.....................
15,500
Hitting the Road— BTN 15-8
There is no specific solution to this activity. The instructor should serve as
a facilitator during this learning activity and, potentially, open a classroom
discussion around student findings.
926
Global Decision— BTN 15-9
1. Samsung (₩ in millions)
Return on total assets = Net Income / Average Total Assets
Current Year
2. (a) Current Year Analysis: Samsung vs Apple vs Google
Return on total assets = Profit margin x Total asset turnover
Company
Return on total assets
Profit margin
Total asset turnover
927
Global Decision (Concluded)
2. (b) Prior Year Analysis: Samsung vs Apple vs Google
Return on total assets = Profit margin x Total asset turnover
Company
Return on total assets*
Profit margin
Total asset turnover
