What amount in profit or loss should be recognized

Assignment Help Accounting Basics
Reference no: EM132906842

Problem - On January 1, 2020, Plain Company purchased 6% bonds in the face amount of P100,000. The bonds mature on January 1, 2024 and were purchased for P105382 to yield 4.5%. The entity used the effective interest method of amortization and interest is payable annually every December 31. The business model for this investment is to collect contractual cash flows composed of interest and principal. On December 31, 2021, the entity changed the business model for this investment to realize fair value changes. On January 1, 2022, the fair value of the bonds was P105,750. What amount in profit or loss should be recognized in 2022 as a result of the reclassification?

Reference no: EM132906842

Questions Cloud

Solutions template during future change strategies : Describe how you might use the lessons as a solutions template during future change strategies.
Discuss three defensive tactics : Discuss three defensive tactics (Golden Parachutes, Recapitalizations and Repurchases and Asset Restructurings) that a target firm's management may use
What will be the after-tax proceeds on the sale : If the sewing machine is sold after 2 years for $36,000, what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%
Find the number of each type of tire sold in one day : A tire store sold two types of? tires, a sports tire and an? all-season tire. For the store? manager, find the number of each type of tire sold in one day.
What amount in profit or loss should be recognized : The fair value of the bonds was P105,750. What amount in profit or loss should be recognized in 2022 as a result of the reclassification
What was the amount of the contributions : Pension data for Fahy Transportation Inc., Assuming cash contributions were made at the end of the year, what was the amount of those contributions?
Change rationales : What is the rationale presented for the change? What are the internal and external pressures considered in the change?
Discuss components of title vii of the civil rights act : List and discuss the six areas that Cox and Blake proposed as reasons for valuing diversity. What else can be added to this list as reasons for valuing diver
Driving the change : Some of the changes affect the processes of doing business and some of the changes affect the people within the organization.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determining interest in the current year

Mark Hancock is a self employed attorney who operates his law practice as an unincorporated sole proprietorship. In 2010, the IRS disallowed several business deductions he took in 2007 and 2008. In addition to paying the deficiency and assessed pe..

  What is Heinlein unleveraged beta

Heinlein Corporation is financed with 0.4 percent debt and the rest equity. What is Heinlein unleveraged beta

  Create development plan to the current organization

Create your own development plan as it applies to the current organization with which you are involved. In your plan, address your plan objectives.

  Which of given statements are true of long-term investments

Which of the following statements are true of long-term investments?

  What is the total net income reported

At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2018

  Computing yearly production numbers

A company produces and sells pillows. It expects to sell 10,000 pillows in the year 2012 and had 1,000 pillows in finished goods inventory at the end of 2011.

  Which the expected credit loss model impairment gain is

Which the expected credit loss model impairment gain is? Computed as the difference between the present value of the remaining future cash flows discounted

  Problem related to gross profit

Gomez Company had a gross profit of $360,000, total purchases of $420,000, and an ending inventory of $240,000 in its first year of operations as a retailer. Gomez's sales in its first year must have been:

  What is the amount of dividends common shareholders

The shareholders' equity of Zig Corporation includes $700,000 of $1 par common stock, What is the amount of dividends common shareholders

  Compute total capital that would appear

Assuming both companies continue to operate separately. Compute total capital that would appear in the consolidated Balance sheet at January 1, 2013

  What new opportunities will you have to explore

What new opportunities will you have to explore? Who or what can you learn from? What patterns of communication, problem-solving.

  Sunny systems manufactures solar panels the company has a

sunny systems manufactures solar panels. the company has a theoretical capacity of 50000 units annually. practical

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