Do It! Review 12-3B Identify where each of the following items would be reported

Question

Do It! Review 12-3B

Identify where each of the following items would be reported in the financial statements.

Item

Financial statement

Category

Item

Financial statement

Category

1. Loss on sale of investments in stock.

Balance SheetIncome Statement

Current AssetsCurrent LiabilitiesInvestmentsLong-Term LiabilitiesProperty, Plant, and EquipmentStockholders’ EquityIntangible AssetsOther Revenues and GainsOther Expenses and Losses

2. Unrealized gain on available-for-sale securities.

Balance SheetIncome Statement

Current AssetsCurrent LiabilitiesInvestmentsLong-Term LiabilitiesProperty, Plant, and EquipmentStockholders’ EquityIntangible AssetsOther Revenues and GainsOther Expenses and Losses

3. Fair value adjustment—trading.

Balance SheetIncome Statement

Current AssetsCurrent LiabilitiesInvestmentsLong-Term LiabilitiesProperty, Plant, and EquipmentStockholders’ EquityIntangible AssetsOther Revenues and GainsOther Expenses and Losses

4. Interest earned on investments in bonds.

Balance SheetIncome Statement

Current AssetsCurrent LiabilitiesInvestmentsLong-Term LiabilitiesProperty, Plant, and EquipmentStockholders’ EquityIntangible AssetsOther Revenues and GainsOther Expenses and Losses

5. Unrealized loss on trading securities.

Balance SheetIncome Statement

Explanation / Answer

1.Loss on sale of investments in stock-Other Expenses & Losses

2.Unrealised gain on available for sale of securities-Should be shown in other Comprehensive Income-Other Revenues & Gains

3.Fair Vale Adjustment -Trading - Stock Holders Equity

4.Interest Earned on Investment in Bonds - Other Revenues & Gains

5.Unrealised loss on Trading Securites-in Profit and Loss Statement to be shown in OCI-Balance sheet reduce in value of securities.

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