Angelo Fernando

01012190021
Tugas Akuntansi Menengah 2 - Pertemuan 05

Brief exercise 17.8

a. Purchase of the investment
Equity Investment £ 13,200
Cash £ 13,200

b. Cash £ 1,300
Dividend Revenue £ 1,300
(400 X 3.25)

c. Equity investment £ 600

Unrealized Gain or Loss (Equity) £ 600
(400 X 34,5) - 13,200

Brief exercise 17.9

Fair value = 4,000
Cost = 3,300
Equity investment $ 700
Unrealized Gain or Loss (Equity) $ 700
(4,000 - 3,300)

Brief exercise 17.10

Purchase of investment
Equity Investments $ 300,000
Cash $ 300,000
 Equity Investments $ 54,000
Investment Income $ 54,000

Cash $ 18,000
Equity Investments $ 18,000

Exercise 17.14
a. Jan-15 Equity Investments - Gonzales Co. $ 301,500
(9000 X 33,5)
Commission Expense $ 1,980
Cash $ 303,480

Apr-01 Equity Invesments - Belment Co. $ 260,000

(5,000 X 52)
Commission Expense $ 3,370
Cash $ 263,370

Sep-10 Equity Invesments - Thep Co. $ 185,500

(7000 X 26,5)
Commission Expense $ 4,910
Cash $ 190,410

b. Gross Selling Price of $3,000 share at $35 $ 105,000

Less: Brokerage commisions, Taxes, and Fees $ (2,850)
Net proceeds from sale $ 102,150
Cost $ (100,500)
Gain on sale of investments $ 1,650
 May 20, 2019 Cash $ 102,150
Equity Investments - Gonzales Company $ 100,500
Gain on Sale of Investments $ 1,650

c. Equity Investment Portfolio

December 31, 2019

Investments Cost Fair Value Unrealized Gain (Loss)

Gonzales Company $ 201,000 $ 180,000 $ (21,000)
Belmont Co. $ 260,000 $ 275,000 $ 15,000
Thep Co. $ 185,500 $ 196,000 $ 10,500
Total of portfolio $ 4,500
Previous fair value $ -
adjustment balance
Fair value adjustment - Cr $ 4,500

Dec 31, 2019 Fair Value Adjustment $ 4,500

Unrealized Gain or Loss - Income $ 4,500

Exercise 17.15
Situation 1
March 18, 2019 Equity Investments - Ramirez Fashion $ 280,000
Cash $ 280,000
June 30, 2019 Cash $ 7,500
Dividend Revenue $ 7,500
(10% X 75000)
Dec 31, 2019 No entry (for net income reported)

Fair value
(15 X 200000) $ 300,000
Carrying value
(14 X 200000) $ 280,000
Unrealized Gain $ 20,000

Dec 31, 2019 Fair Value Adjustment $ 20,000

Unrealized Holding Gain (Loss) - Income $ 20,000

Situation 2
Jan 1, 2019 Equity Investment $ 67,500
Cash $ 67,500
(25% X 30000 X 9)

June 15, 2019 Cash $ 9,000

Equity Investments $ 9,000
(25% X 36,000)

December 31, 2019 Equity investments $ 21,250

Investments Income $ 21,250
(25% X 85,000)