《财务会计 双语教学 Financial Accounting Weygandt Kieso Kimmel ch13.ppt》由会员分享，可在线阅读，更多相关《财务会计 双语教学 Financial Accounting Weygandt Kieso Kimmel ch13.ppt（31页珍藏版）》请在taowenge.com淘文阁网|工程机械CAD图纸|机械工程制图|CAD装配图下载|SolidWorks_CaTia_CAD_UG_PROE_设计图分享下载上搜索。
1、John Wiley&Sons,Inc.Financial Accounting,5ePrepared byKurt M.Hull,MBA CPACalifornia State University,Los AngelesWeygandt,Kieso,&KimmelCHAPTER 13INVESTMENTSSTUDY OBJECTIVESAfter studying this chapter,you should understand:Why corporations invest in debt and stock securitiesConsolidated financial Stat
2、ementsAccounting for debt investmentsValuation of debt and stock investmentsAccounting for stock investmentsShort-term vs.long-term investmentsReasonTypical InvestmentTo house excess cash until neededLow-risk,high-liquidity,short-term securities such as government-issued securitiesTo generate earnin
3、gsI need 1,000 Treasury bills by tonight!Debt securities(banks and other financial institutions);and stock securities(mutual funds and pension funds)To meet strategic goalsStocks of companies in a related industry or in an unrelated industry that the company wishes to enterSTUDY OBJECTIVE 1WHY CORPO
4、RATIONS INVESTDateAccount Titles and ExplanationDebitCreditJan.1Debt Investments Cash (To record purchase of 50 Doan Inc.bonds)54,000 54,000STUDY OBJECTIVE 2ACCOUNTING FOR DEBT INVESTMENTSDateAccount Titles and ExplanationDebitCreditJuly 1Cash Interest Revenue (To record receipt of interest on Doan
5、Inc.bonds)2,000 2,000DateAccount Titles and ExplanationDebitCreditDec.31Interest Receivable Interest Revenue (To accrue interest on Doan Inc.bonds)2,000 2,000RECORDING BOND INTERESTDateAccount Titles and ExplanationDebitCreditJan.1Cash Interest Receivable (To record receipt of accrued interest)2,000
6、 2,000RECORDING BOND INTERESTDateAccount Titles and ExplanationDebitCreditJan.1Cash Debt Investments Gain on Sale of Debt Investments (To record sale of Doan Inc.bonds)58,000 54,000 4,000RECORDING SALE OF BONDSREVIEW QUESTION26,000 Debt Investments2,000 Gain on Sale28,000CashFeb 6CreditDebitAccounts
7、Date Investors Ownership Presumed Interest in Investees Influence Accounting Common Stock on Investee Guidelines Less than 20%Insignificant Cost method Between 20%Significant Equity method and 50%More than 50%Controlling Consolidated financial statements STUDY OBJECTIVE 3ACCOUNTING FOR STOCK INVESTM
8、ENTSDateAccount Titles and ExplanationDebitCreditJuly 1Stock Investments Cash (To record purchase of 1,000 shares of Beal Corporation common stock)40,500 40,500RECORDING STOCK INVESTMENTSHOLDINGS 20%DateAccount Titles and ExplanationDebitCreditDec.31Cash(1,000 x$2)Dividend Revenue (To record receipt
9、 of a cash dividend)2,000 2,000RECORDING DIVIDENDS HOLDINGS 20%DateAccount Titles and ExplanationDebitCreditFeb.10CashLoss on Sale of Stock Investments Stock Investments (To record sale of Beal common stock)39,500 1,000 40,500RECORDING A SALEHOLDINGS 50%-CONSOLIDATIONSControlling GroupHome Box Offic
10、e Board of DirectorsTime Warner,Inc.Board of DirectorsHome Box Office CorporationTime Warner,Inc.Time Warner,Inc.ControlControlSeparate Legal EntitiesSingle Economic EntityRECORDING STOCK INVESTMENTSMANAGEMENT PERSPECTIVETradingWell sell within ten days.Available-for-SaleWell hold the stock for a wh
11、ile to see how it performs.Held-to-MaturityWe intend to hold these bonds until maturity.At fair value with changes reported in net incomeAt fair value with changes reported in the stockholders equity sectionAt amortized costSTUDY OBJECTIVE 5VALUING AND REPORTING INVESTMENTSFAIR MARKET VALUE Trading
12、Securities,December 31,2006 Investments Cost Fair Value Unrealized Gain(Loss)Yorkville Company bonds$50,000$48,000$(2,000)Kodak Company stock 90,000 99,000 9,000 Total$140,000$147,000$7,000 TRADING SECURITIESDateAccount Titles and ExplanationDebitCreditDec.31Market Adjustment Trading Unrealized Gain
13、 Income (To record unrealized gain on trading securities)7,000 7,000VALUATION AND REPORTING OF TRADING SECURITIESREVIEW QUESTIONAt the end of the first year of operations,the total cost of a trading securities portfolio is$120,000.Fair value is$115,000.Prepare the journal entry to adjust the securit
14、ies to fair value.Income Statement (to adjust trading portfolio to market)5,000 Short-term investments5,000Unrealized loss on trading securitiesDec 31CreditDebitAccountsDate Available-for-Sale Securities,December 31,200 6 Investments Cost Fair Value Unrealized Gain(Loss)Campbell Soup Corporation 8%b
15、onds$93,537$103,600$10,063 Hersey Corporation stock 200,000 180,400 (19,600)Total$293,537$284,000$(9,537)AVAILABLE FOR SALE SECURITIESDateAccount Titles and ExplanationDebitCreditDec.31Unrealized Loss Equity Market Adjustment Available-for-Sale (To record unrealized loss on available-for-sale securi
16、ties)9,537 9,537VALUATION AND REPORTING OF AVAILABLE FOR SALE SECURITIES PACE CORPORATION Balance Sheet(partial)Current assets Cash$21,000 Short-term Investments at fair value 147,000 STUDY OBJECTIVE 6SHORT-TERM vs.LONG-TERM INVESTMENTSLONG-TERM INVESTMENTSBALANCE SHEET PRESENTATIONDAWSON INC.Partia
17、l Balance SheetStockholders equity Common stock$3,000,000 Retained earnings 1,500,000 Total paid-in capital and retained earnings 4,500,000 Less:Unrealized loss on available-for-sale securities (100,000)Total stockholders equity$4,400,000UNREALIZED LOSS IN STOCKHOLDERS EQUITY PACE CORPORATION Balanc
18、e Sheet December 31,2006 Assets Current assets Cash$21,000 Short-term investments,at fair value 147,000 Accounts receivable$84,000 Less:Allowance for doubtful accounts 4,000 80,000 Merchandise inventory,at FIFO cost 43,000 Prepaid insurance 23,000 Total current assets 314,000 Investments Investments
19、 in stock of less than 20%owned companies,at fair value 50,000 Investment in stock of 20%50%owned company,at equity 150,000 Total investments 200,000 Property,plant,and equipment Land 200,000 Buildings$800,000 Less:Accumulated depreciation 200,000 600,000 Equipment 180,000 Less:Accumulated depreciat
20、ion 54,000 126,000 Total property,plant,and equipment 926,000 Intangible assets Goodwill(Note 1)270,000 Total intangible assets 270,000 Total assets$1,710,000 CLASSIFIED BALANCE SHEET Liabilities and Stockholders Equity Current liabilities Accounts payable$185,000 Bond interest payable 10,000 Federa
21、l income taxes payable 60,000 Total current liabilities 255,000 Long-term liabilities Bonds payable,10%,due 2010$300,000 Less:Discount on bonds 10,000 Total Long-term liabilities 290,000 Total liabilities 545,000 Stockholders equity Paid-in capital Common stock,$10 par value,200,000 shares authorize
22、d,80,000 issued and outstanding 800,000 Paid-in capital in excess of par value 100,000 Total paid-in capital 900,000 Retained earnings(Note 2)255,000 Total paid-in capital and retained earnings 1,155,000 Add:Unrealized gain on available for-sale securities 10,000 Total stockholders equity 1,165,000
23、Total liabilities and stockholders equity$1,710,000 Note 1.Goodwill is amortized by the straight-line over 40 years.Note 2.Retained earnings of$100,000 is restricted for plant expansion.CLASSIFIED BALANCE SHEETCOPYRIGHTCOPYRIGHTCopyright 2006 John Wiley&Sons,Inc.All rights reserved.Reproduction or t
24、ranslation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written consent of the copyright owner is unlawful.Request for further information should be addressed to the Permissions Department,John Wiley&Sons,Inc.The purchaser may make back-up copies for his/her own use only and not for distribution or resale.The Publisher assumes no responsibility for errors,omissions,or damages,caused by the use of these programs or from the use of the information contained herein.CHAPTER 13 CHAPTER 13 INVESTMENTSINVESTMENTS