財務(wù)會計 雙語教學(xué) Financial Accounting Weygandt Kieso Kimmel ch13課件

JohnWiley&Sons,Inc.FinancialAccounting,5ePreparedbyKurtM.Hull,MBACPACaliforniaStateUniversity,LosAngelesWeygandt,Kieso,&KimmelCHAPTER13INVESTMENTSSTUDYOBJECTIVESAfterstudyingthischapter,youshouldunderstand:WhycorporationsinvestindebtandstocksecuritiesConsolidatedfinancialStatementsAccountingfordebtinvestmentsValuationofdebtandstockinvestmentsAccountingforstockinvestmentsShort-termvs.long-terminvestmentsReasonTypicalInvestmentTohouseexcesscashuntilneededLow-risk,high-liquidity,short-termsecuritiessuchasgovernment-issuedsecuritiesTogenerateearningsIneed1,000Treasurybillsbytonight!Debtsecurities(banksandotherfinancialinstitutions);andstocksecurities(mutualfundsandpensionfunds)Tomeetstrategic

goalsStocksofcompaniesinarelatedindustryorinanunrelatedindustrythatthecompanywishestoenterSTUDYOBJECTIVE1WHYCORPORATIONSINVESTThebondspay$2,000interestonJuly1andJanuary1($50,000x8%x?).TheJuly1entryis:Itisnecessarytoaccrue$2,000interestearnedsinceJuly1atyear-end.TheDecember31entryis:DateAccountTitlesandExplanationDebitCreditJuly1CashInterestRevenue(TorecordreceiptofinterestonDoanInc.bonds)2,0002,000DateAccountTitlesandExplanationDebitCreditDec.31InterestReceivableInterestRevenue(ToaccrueinterestonDoanInc.bonds)2,0002,000RECORDINGBONDINTERESTOnJanuary1,2007,KuhlCorporationreceivesnetproceedsof$58,000onthesaleoftheDoanInc.bonds.Theentrytorecordthesaleandrecognizethegainis:DateAccountTitlesandExplanationDebitCreditJan.1CashDebtInvestmentsGainonSaleofDebtInvestments(TorecordsaleofDoanInc.bonds)58,00054,0004,000RECORDINGSALEOFBONDSPROCEEDS–COST=GAINorLOSSREVIEWQUESTIONOnFebruary6,HanesCompanysellsdebtinvestmentscosting$26,000for$28,000.

Preparethejournalentrytorecordthesale.26,000DebtInvestments2,000GainonSale28,000CashFeb6CreditDebitAccountsDateProceeds–Cost=GainorLossOnJuly1,2006,SanchezCorporationacquires1,000shares(10%)ofBealCorporationcommonstockfor$40pershareplusbrokeragefeesof$500.Theentryforthepurchaseis:DateAccountTitlesandExplanationDebitCreditJuly1StockInvestmentsCash(Torecordpurchaseof1,000sharesofBealCorporationcommonstock)40,50040,500RECORDINGSTOCKINVESTMENTSHOLDINGS<20%COSTMETHOD

Recordinvestmentatcost.Recognizerevenuewhencashdividendsarereceived.DateAccountTitlesandExplanationDebitCreditDec.31Cash(1,000x$2)DividendRevenue(Torecordreceiptofacashdividend)2,0002,000RECORDINGDIVIDENDSHOLDINGS<20%OnDecember31,SanchezCorporationreceivesa$2persharecashdividend.Dividendrevenueisreportedontheincomestatementunder“Otherrevenuesandgains.”

RECORDINGSTOCKINVESTMENTSHOLDINGSBETWEEN20%&50%EQUITYMETHOD

Recordinvestmentatcost.Investmentaccountadjustedannuallyfordividendsreceivedandshareofinvesteenetincome.PercentofinvesteenetlossPercentofinvesteenetincomeDividendsreceivedCostofinvestmentCreditDebit OnJanuary1,2006,MilarCorporationacquires30%ofthecommonstockofBeckCompanyfor$120,000.Theentrytorecordthistransactionis:DateAccountTitlesandExplanationDebitCreditJan.1StockInvestmentsCash(TorecordpurchaseofBeckcommonstock)120,000120,000RECORDINGACQUISITIONSHOLDINGSBETWEEN20%&50%

StockInvestments

January1

120,000

December31

12,000

December31

30,000

December31Balance

138,000

RevenuefromInvestmentinBeckCompany

December31

30,000

INVESTMENTANDREVENUEACCOUNTSAFTERPOSTINGMilar’sshareofBeck’snetincomeis$30,000.Thisincreasestheinvestment.Milardoesnotreceiveanycash.DividendsreceivedFromBeckreducetheinvestment.Milarreceives$12,000incash.IfBeckreportsanetloss,Milar’ssharewouldreducetheinvestment.APARENTCOMPANYownsmorethan50%ofthecommonstockofaSUBSIDIARYCOMPANY.TheparentcompanyhasaCONTROLLINGINTERESTinthesubsidiarycompany.CONSOLIDATEDFINANCIALSTATEMENTSareusuallyprepared.PARENTOWNS50%OFSUBA60%OFSUBB75%OFSUBCSTUDYOBJECTIVE4ACCOUNTINGFORSTOCKINVESTMENTSHOLDINGS>50%-CONSOLIDATIONSTradingWe’llsellwithintendays.Available-for-SaleWe’llholdthestockforawhiletoseehowitperforms.Held-to-MaturityWeintendtoholdthesebondsuntilmaturity.AtfairvaluewithchangesreportedinnetincomeAtfairvaluewithchangesreportedinthestockholders’equitysectionAtamortizedcostFairvalue=expectedcashrealizablevalueofthesecuritiessoldinnormalmarketconditions.STUDYOBJECTIVE5VALUINGANDREPORTINGINVESTMENTSFAIRMARKETVALUEHeldwiththeintentionofsellingtheminashortperiod.Reportedatfairvalue.ChangesfromcostarereportedasunrealizedgainsorlossesandincludedinNETINCOME.PaceCorporationholdingsareillustratedbelow:

TradingSecurities,December31,2006

Investments

Cost

FairValue

UnrealizedGain(Loss)

YorkvilleCompanybonds

$50,000

$48,000

$(2,000)

KodakCompanystock

90,000

99,000

9,000

Total

$140,000

$147,000

$7,000

TRADINGSECURITIESTradingsecuritiesareadjustedtomarketvalueatthebalancesheetdate.DateAccountTitlesandExplanationDebitCreditDec.31MarketAdjustment—TradingUnrealizedGain—Income(Torecordunrealizedgainontradingsecurities)7,000 7,000VALUATIONANDREPORTINGOFTRADINGSECURITIESFAIRVALUE–COST=UNREALIZEDGAIN(LOSS)FairvalueonbalancesheetUnrealizedgain/lossonincomestatementREVIEWQUESTIONAttheendofthefirstyearofoperations,thetotalcostofatradingsecuritiesportfoliois$120,000.Fairvalueis$115,000.Preparethejournalentrytoadjustthesecuritiestofairvalue.IncomeStatement(toadjusttradingportfoliotomarket)5,000Short-terminvestments5,000UnrealizedlossontradingsecuritiesDec31CreditDebitAccountsDateDateAccountTitlesandExplanationDebitCreditDec.31UnrealizedLoss—EquityMarketAdjustment—Available-for-Sale(Torecordunrealizedlossonavailable-for-salesecurities)9,5379,537Availableforsalesecuritiesareadjustedtomarketvalueatthebalancesheetdate.FAIRVALUE–COST=UNREALIZEDGAIN(LOSS)FairvalueonbalancesheetUnrealizedgain/lossinstockholders’equityVALUATIONANDREPORTINGOFAVAILABLEFORSALESECURITIESShort-terminvestmentsarereadilymarketable,andIntendedtobeconvertedintocashwithinthenextyearoroperatingcycle,whicheverislonger.Listedonbalancesheetimmediatelybelowcash.Reportedatfairvalue.

PACECORPORATION

BalanceSheet(partial)

Currentassets

Cash

$21,000

Short-termInvestmentsatfairvalue

147,000

STUDYOBJECTIVE6SHORT-TERMvs.LONG-TERMINVESTMENTSLong-terminvestmentsarereported onthebalancesheetimmediatelybelowcurrentassets.Intheincomestatement,theitemsbelowarereportedinthenon-operatingsection:LONG-TERMINVESTMENTSBALANCESHEETPRESENTATIONAnunrealizedgainorlossonavailable-for-salesecuritiesisreportedasaseparatecomponentofstockholders’equity.Thestatementpresentationoftheunrealizedlossisshownbelow.DAWSONINC.PartialBalanceSheetStockholders’equityCommonstock$3,000,000Retainedearnings1,500,000Totalpaid-incapitalandretainedearnings

4,500,000Less:Unrealizedlossonavailable-for-salesecurities(100,000)Totalstockholders’equity$4,400,000UNREALIZEDLOSSINSTOCKHOLDERS’EQUITY

LiabilitiesandStockholders’Equity

Currentliabilities

Accountspayable

$185,000

Bondinterestpayable

10,000

Federalincometaxespayable

60,000

Totalcurrentliabilities

255,000

Long-termliabilities

Bondspayable,10%,due2010

$300,000

Less:Discountonbonds

10,000

TotalLong-termliabilities

290,000

Totalliabilities

545,000

Stockholders’equity

Paid-incapital

Commonstock,$10parvalue,200,000shares

authorized,80,000issuedandoutstanding

800,000

Paid-incapitalinexcessofparvalue

100,000

Totalpaid-incapital

900,000

Retainedearnings(Note2)

255,000

Totalpaid-incapitalandretainedearnings

1,155,000

Add:Unrealizedgainonavailablefor-salesecurities

10,000

Totalstockholders’equity

1,165,000