Prepare the journal entries to record the impairment

Assignment Help Accounting Basics
Reference no: EM131743973

Problem - Elaina co. has the following investments as of Dec. 31, 2017: Investments in common stock of Laser Co.-$1,500,000; Investments in debt securities of FourSquare Co.-$3,300,000. In both investments, the carrying value and the fair value of these two investments are the same at Dec. 31, 2017. Elaina's stock investments does not result in significant influence on the operations of Laser Co.. Elaina's debt investments is considered held-to-maturity. At Dec. 31, 2018, the shares in Laser Co. are valued at $1,100,000; the debt investment securities of FourSquare Co. are valued at $2,500,000. Assume that these investments are considered impaired.

a) Prepare the journal entries to record the impairment of these two securities at Dec. 31, 2018.

b) Assuming the fair value of Laser shares is $1,400,000 and the value of its debt investment is $2,950,000, what entries, if any, should be recorded in 2019 related to impairment?

c) Prepare the journal entries at Dec. 31, 2018, assuming these securities are not impaired (Ignore interest revenue entries).

d) Assume that the debt investment in FourSquare Co. was available-for-sale and that the expected credit loss was $90,000. Prepare the journal entry to record this I'mpairment on Dec. 31, 2018.

Reference no: EM131743973

Questions Cloud

What happens to a bond current market value : What happens to a bond's current market value, paying 5% interest, when interest rates go up
What lessons could employees learn from phil experience : Compliance Officer and Confidentiality The employee who decides to place confidence and trust in a corporate compliance officer must understand the following.
What should the hrd employee do at the given point : What should the HRD employee do at this point? Explain how you will implement the decision made and reflect on whether this option was the most effective.
What symbolic codes are used in american media today : What are some symbols you've noticed in your environment and from your culture
Prepare the journal entries to record the impairment : Elaina co. has the following investments as of Dec. 31, 2017: Prepare the journal entries to record the impairment of these two securities at Dec. 31, 2018
Options with a contract value : You are managing a $25 million stock portfolio with a beta of 1.2, which you decide to hedge by buying index put options with a contract value of $150,000.
Calculate the npv and irr : Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and which to recommend.
Determine how to improve processes and systems : Shoot the Consultant Justin, a new consultant, was assigned to review an organization's human resources department and provide recommendations.
Discuss the progress you''ve made in academic writing : discuss the progress you've made in academic writing, specifically - argument writing. How have you improved in developing a claim for an issue

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the amount of the impairment

The expected, undiscounted, net cash flows from the use of the asset and the eventual disposition are determined to be $760,000, and it has a current market value of $710,000. What is the amount of the impairment, if any, that should be recorded b..

  Find the cost incurred in a manufacturing firm

For each of the costs incurred in a manufacturing firm, indicate whether the costs are fiXed (F) or variable (V) and whether they are period costs (P) or product costs (M) under full absorption costing.

  The benefits from expenditures can be planned with certainty

The benefits from expenditures can be planned with certainty

  What is the balance in estimated warranty liability

What is the balance in Estimated Warranty Liability at 12-31-X4 and the balance in Warranty Expense for 20X4, respectively?can you please snow the work, so I can understand the concept of this questiona. $150,000;nbsp; 30,000b. $190,000; nbsp; 30,000..

  Compute the dollar amount of preferred dividends

Earnings per Share, Price-Earnings Ratio Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is $51.50.

  Compute the net present value of each project enter

dougs custom construction company is considering three new projects each requiring an equipment investment of 22000.

  Reducing estimated sales tax revenues

He legislature revised the budget by reducing estimated sales tax revenues by $ 125,000 and reducing the appropriation for General government all other by $ 75,000.

  Mr jahanzaib has set up a new sole proprietorship business

mr. jahanzaib has set up a new sole proprietorship business one year ago. at the end of the financial year he has to

  The cash account balance was 38750 during june cash

on june 1 the cash account balance was 38750. during june cash payments totaled 239140 and the june 30 balance was

  What type of disciplinary action you would recommend

What type of disciplinary action you would recommend for employees who are discovered to be stealing inventory

  That shown in table 15-16 and use the work sheet to prepare

Extend the trial balance to an eight column work sheet like that shown in Table 15-16 and use the work sheet to prepare the following financial statements

  Prepare the necessary closing entries at december

J. Giovanni invested $30,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Giovanni, Capital account was $61,800).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd