Sony Sony Corporation was organized in 1946 under the name Tokyo Tsushin Kogyo. The name “Sony” is a combination of the Latin word sonus (sound) and the English word sonny;

it was given to a small transistor radio sold by the company in the United States, starting in 1954. The radio was so popular that the entire company changed its name to Sony in 1958.

In its 2006 annual report, Sony included the note to its financial statements shown on the following page.

8. Marketable securities and securities investments and other

1. In the notes to its English-language financial statements, Sony states that those statements “conform with accounting principles generally accepted in the United States.”
However, Sony’s official accounting records are maintained using Japanese accounting principles. Why would Sony go to the trouble of preparing a separate set of Englishlanguage financial statements using U.S. accounting principles?
2. Assuming that approximately the same available-for-sale securities were on hand in both 2005 and 2006, how well did Sony’s investments perform in 2006?
3. What journal entries did Sony make during the year to record the revaluation of available-for-sale securities? Use only the total amounts (that is, don’t use the separate amounts for debt and equity securities), and ignore the fact that securities were bought and sold during the year.

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Available-for-sale: March 31, 2005 Gross Gross unrealized unrealized Yen in millions March 31, 2006 Cost gains losses Fair value Cost Gross unrealized unrealized gains losses Gross Fair value Debt securities 2,090,605 58,161 Equity securities 107,126 49,350 (2,464) (814) 2,146,302 2,522,864 155,662 17,021 227,079 171,921 (22,810) (1,589) 2,517,075 397,411 Held-to-maturity securities 27,431 Total 2,225,162 530 108,041 (13) \(3,291) 27,948 2,329,912 2,783,136 189,074 33,193 132 (221) (24,620) 33,104 2,947,590 Dollars in millions March 31, 2006 Gross Gross Available-for-sale: Debt securities Equity securities Held-to-maturity securities Total unrealized unrealized Cost gains losses Fair value $21,563 1,941 $ 145 1,470 $(195) (14) $21,513 3,397 283 (1) 283 $23,787 $1,616 $(210) $25,193