ACCTMIS 2200 Lecture 10: 10. Investments Recitation

• School: Ohio State University
• Department: Accounting and Management Info
• Course: ACCTMIS 2200
• Professor: Marc Smith

Document Summary

Investments - own <20% of other company"s stock. The investment account (asset) is shown on balance sheet at market value. Record an unrealized gain/loss on income statement at end of every year (mv end of current year) - (mv end of last year) = unrealized gain/loss. Record a realized gain/loss on income statement only when the investments sold (selling price) - (mv previous year) = realized gain/loss. Determine the amount of (a) realized gain/loss and (b) unrealized gain/loss for each of the 3 years. Unrealized gain/loss = 45,000 loss (53*15000) - (56*15000) = -45000. Realized gain/loss = 13,500 gain (62*1500) - (53*1500) = 13500. Unrealized gain/loss = 202,500 gain (68*13500) - (53*13500) = 202500. Realized gain/loss = 23,000 loss (45*1000) - (68*1000) = -23000. Unrealized gain/loss = 412,500 loss (35*12500) - (68*12500) = -412500. Investments - own >20% of other company"s stock. Increase investment account and record investment revenue for our share of the ni.