Lydell Capital, Inc., makes investments in trading securities. Selected income s
ID: 2519837 • Letter: L
Question
Lydell Capital, Inc., makes investments in trading securities. Selected income statement items for the years ended December 31, 2016 and 2017, plus selected items from comparative balance sheets, are shown in the income statement and balance sheet below:
There were no dividends.
Determine the missing items.
Lydell Capital, Inc.
Lydell Capital, Inc. Selected Income Statement Items For the Years Ended December 31, 2016 and 2017 2016 2017 Operating Income $ $26,100 Unrealized Gain (Loss) (3300) Net Income $ $22,800Explanation / Answer
Lydell Capital, Inc.
Selected Income Statement Items
For the Years Ended December 31, 2016 and 2017
2016
2017
Operating Income
(Net income - Unrealised gain)
$61,700
$26,100
Unrealized Gain (Loss)
(From balance sheet allowance for trading investment - $14,700)
$14,700
($3,300.00)
Net Income:
(for 2016 = Retained earnings as on 2017- Retained earnings as on 2016, since there is no dividend payments) = (312,600-236,200)
$76,400
$22,800
Lydell Capital, Inc.
Selected Balance Sheet Items
December 31, 2015, 2016, and 2017
Dec. 31, 2015
Dec. 31, 2016
Dec. 31, 2017
Trading Investments, at Cost (A)
$200,400
$237,800
$280,200
Valuation Allowance for Trading Investments
(2017 from Income statement - ($3,300) (B)
($9,800)
$14,700
($3,300)
Trading Investments, at Fair Value (C=A+B)
(Trading investment- allowance for investments)
$190,600
$252,500
$276,900
Retained Earnings
(Previous year retained earnings+2017 Net Income)
(312,600+22,800)
$236,200
$312,600
$335,400
Lydell Capital, Inc.
Selected Income Statement Items
For the Years Ended December 31, 2016 and 2017
2016
2017
Operating Income
(Net income - Unrealised gain)
$61,700
$26,100
Unrealized Gain (Loss)
(From balance sheet allowance for trading investment - $14,700)
$14,700
($3,300.00)
Net Income:
(for 2016 = Retained earnings as on 2017- Retained earnings as on 2016, since there is no dividend payments) = (312,600-236,200)
$76,400
$22,800
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