Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Harry Potter, Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. Fair Value

image text in transcribedimage text in transcribed

Harry Potter, Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. Fair Value 12/31/2020 Fair Value 12/31/2021 Amortized Cost 12/31/2020 Amortized Cost 12/31/2021 Held-to-Maturity Securities : Peverell Brothers Co. Bonds $ 382,000 $ 407,000 $ 374,500 $ 367,000 Fair Value 12/31/2020 $ 59,400 Fair Value 12/31/2021 $ 67,700 Cost (at Face Value) $ 70,600 Trading Securities: Elder Wand Co. Bonds Resurrection Stone Inc. Bonds Invisibility Cloak Inc. Bonds $ 55,200 $ 84,000 $ 46,000 $ 51,000 $ 45,500 $ 39,900 Cost (at Face Value) Available-for- Sale Securities: Firebolt Co. Bonds Fair Value 12/31/2020 $ 138,900 Fair Value 12/31/2021 $ 155, 300 $ 147,000 1. What should Harry Potter, Inc. report for its total investment in bonds in the December 31, 2020 and December 31, 2021 balance sheets? 2. What would be the balance in Harry Potter's Accumulated Other Comprehensive Income (AOCI) with respect to these investments in its 12/31/2020 and 12/31/2021 balance sheets (ignore taxes)? 3. What total unrealized holding gain or loss would Harry Potter report in its 2020 and 2021 Net Income relative to its investments in bonds? 4. What total unrealized holding gain or loss would Harry Potter report in its 2020 and 2021 Other Comprehensive Income (OCI) relative to its investments in bonds? 1. What should Harry Potter, Inc. report for its total investment in bonds in the December 31, 2020 and December 31, 2021 balance sheets? 2. What would be the balance in Harry Potter's Accumulated Other Comprehensive Income (AOCI) with respect to these investments in its 12/31/2020 and 12/31/2021 balance sheets (ignore taxes)? 3. What total unrealized holding gain or loss would Harry Potter report in its 2020 and 2021 Net Income relative to its investments in bonds? 4. What total unrealized holding gain or loss would Harry Potter report in its 2020 and 2021 Other Comprehensive Income (OCI) relative to its investments in bonds? 2020 2021 Total investment in bonds reported on the Dec. 31 balance sheet Accumulated Other Comprehensive Income (AOCI) Balance on Dec. 31 Unrealized holding gain/loss included in Net Income Unrealized holding gain/loss included in Other Comprehensive Income (OCI)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Complete Guide To Operational Auditing

Authors: Harry R. Reider

1st Edition

0471594199, 978-0471594192

More Books

Students also viewed these Accounting questions

Question

manageremployee relationship deteriorating over time;

Answered: 1 week ago