Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 12-9 (Algo) Securities held-to-maturity; trading securities and equity investments [LO12-1, 12-2, 12-3, 12-5] Amalgamated General Corporation is a consulting firm that also offers financial

image text in transcribed
Problem 12-9 (Algo) Securities held-to-maturity; trading securities and equity investments [LO12-1, 12-2, 12-3, 12-5] Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated's investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $45 million of 10% bonds of Kansas Abstractors, Inc. purchased on May 1, 2021 at face value and held in Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31 2021 Oct. 18 Purchased 2 million shares of Millwork Ventures Company common stock for $76 million. Millwork has a total of 50 million shares issued. 31 Received semiannual interest of $2.7 million from the Kansas Abstractors bonds. Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value to be held until they mature in 2031. Semiannual interest is payable April 30 and October 31. 1 Sold the Kansas Abstractors bonds for $41 million because rising interest rates are expected to cause their fair value to continue to fall. unrealized gains and losses had been recorded on these bonds previously Dec. 1 Purchased 12% bonds of Household Plastics Corporation at their $60 million face value, to be held until they mature in 2031. Seelannual interest is payable May 31 and November 30. 20 Purchased U. 5. Treasury bonds for 16.6 million as trading securities, hoping to earn profits on short-term differences in prices. 21 Purchased 4 million shares of HS Corporation's 64 million shares of Cowon stock for $64 million, planning to hold these shares until market conditions encourage their sale. 23 Sold the Treasury bonds for $6.9 million 29 Received cash dividends of $7 million from the Hillwork Ventures Company shares of common stock. 31 Recorded any necessary adjusting entries relating to the investments. The market price of the Millwork Ventures Company Common stock was $34.50 per share and $17.50 per share for the ons Corporation common stock. The fair values of the bond westents were $9. 0 illion for household Plastics Corporation and $16.4 million for Holistic Entertainment Enterprises 2022 Jan. 7 sold the x Corporation common stock shares for so million

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

Principles Of Islamic Accounting

Authors: Nabil Baydoun, Maliah Sulaiman, Roger J. Willett, Shahul Ibrahim

1st Edition

1119023297, 9781119023296

More Books

Students also viewed these Accounting questions

Question

Compare value orientations among cultures

Answered: 1 week ago

Question

Discuss the relationship between culture and the built environment

Answered: 1 week ago