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Final

UGBA 120AB Lecture Notes - Lecture 1: Deferred Income, Finance Lease, Situation TwoExam


Department
Business Administration, Undergraduate
Course Code
UGBA 120AB
Professor
Stanton
Study Guide
Final

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Kousha Modanlou
6/15/19
UGBA 120AB
Professor Stanton
Chapter 12-15 Complete Homework Packet
Kousha Modanlou
5/31/19
UGBA 120AB
Professor Stanton
Chapter 12 HW Due 5/31/19: E12-21
E12-21:
Requirement 1)-- error made before books are adjusted or closed in 2018
Journal entry made by the company:
Cash $100,000
Investments $100,000
The journal entry that should have been made by the company instead:
Cash $100,000
Fair value adjustment (acct balance) $5000
Investments $80,000
Gain on sale of investments ($100,000 - $75,000) $25,000
Entry needed to correct the error:
Fair value adjustment (acct balance) $5000
Investments (to balance) $20,000
Gain on sale of investments ($100,000 - $75,000) $25,000

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Requirement 2)-- error discovered in early 2019
Entry needed to correct the error:
Investments (to balance) $25,000
Retained earnings ($100,000 - $75,000) $25,000

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Kousha Modanlou
6/3/19
UGBA 120AB
Professor Stanton
Chapter 12 HW Due 6/3/19: P12-5, P12-9
P12-5
Requirement 1
2018
March 31
Investment in Distribution Transformers Corporation Bonds $400,000
Cash $400,000
September 1
Investment in American Instruments Bonds $900,000
Cash $900,000
September 30
Cash $ 16,000
Interest Revenue ($400,000 x 0.08 x 6/12) $16,000
October 2
1)Update fair value adjustment
Fair Value Adjustment
Balance on 3/31/2018 $0
±Adjustment Needed to update fair value ______?_________
Balance needed on 10/2/2018 ($425,000 - $400,000) $25,000
Fair value adjustment $ 25,000
Unrealized holding gain--NI (to balance) $25,000
2)Recording the sale transaction
Cash $425,000
Investment in Distribution Transformers Corporation Bonds $400,000
Fair value adjustment (account balance) $25,000
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