FKG Inc. carries the following debt investments on its books at December 31, 2017, and December...

50.1K

Verified Solution

Question

Accounting

FKG Inc. carries the following debt investments on its books atDecember 31, 2017, and December 31, 2018. All securities werepurchased during 2017. Trading Securities: Company Cost Value, Dec.31, 2017 Value, Dec. 31, 2018 A Company $25,000 $13,000 $20,000 BCompany $13,000 $20,000 $20,000 C Company $35,000 $30,000 $25,000Available for Sale Securities: Company Cost Value, Dec. 31, 2017Value, Dec. 31, 2018 X Company $210,000 $130,000 $50,000 Y Company$ 50,000 $ 60,000 $70,000
Required:
(1.) Prepare the necessary journal entries for FKG on December31, 2017, and December 31, 2018.
(2.) What net effect would the valuation of these debtinvestments have on 2017 net income?
(3.) What net effect would the valuation of these debtinvestments have on 2018 net income?

Answer & Explanation Solved by verified expert

3.9 Ratings (767 Votes)

1 Prepare the necessary journal entries for FKG on December 31 2017 and December 31 2018 Journal entries for FKG on December 31 2017 Date Accounting title Debit Credit Dec 31 2017 Loss on Trading Investments 2500013000 12000 Investment in A Company 12000 Investment in B Company 7000 Profit on Trading Investments 2000013000 7000 Loss on See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member