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Financial Accounting: Weygandt Kimmel
Financial Accounting: Weygandt Kimmel
Chapter 13
Investments
Chapter Outline
Learning Objectives
LO 1 Explain how to account for debt investments.
LO 2 Explain how to account for share investments.
LO 3 Indicate how debt and share investments are
reported in financial statements.
Between 20%
Less than 20% More Than 50%
and 50%
Insignificant Significant Controlling
influence on influence on influence on
Investee investee investee
Dec. 31 30,000
The closing entry to transfer the Unrealized Gain or Loss—Equity to Accumulated Other
Comprehensive Income is:
Dec. 31 Accumulated Other Comprehensive Income 9,537
(2020) Unrealized Gain or Loss—Equity 9,537
Equity
Share capital—ordinary € 1,200,000
Retained Earnings 126,200
Accumulated other comprehensive loss (9,537)
Total Equity € 1,316,663
It has a €9,537 credit balance from the previous year, so Ingrao must debit its Fair Value
Adjustment—Non-Trading account by €11,174 (€9,537 + €1,637) to achieve a €1,637
debit balance.
Dec. 31 Fair Value Adjustment—Non-Trading 11,174
(2021) Unrealized Gain or Loss—Equity 11,174
The closing entry to transfer the Unrealized Gain or Loss—Equity to Accumulated Other
Comprehensive Income is:
Dec. 31 Unrealized Gain or Loss—Equity 11,174
(2021) Accumulated Other Comprehensive Income 11,174
Equity
Share capital—ordinary € 1,200,000
Retained Earnings 327,600
Accumulated other comprehensive income 1,637
Total Equity € 1,529,237
Assets
Goodwill £ 5,000
Plant and equipment (net) 480,000
Current assets 115,000
Total assets £600,000
Equity and Liabilities
Equity
Share capital—ordinary £300,000
Retained earnings 175,000 £475,000
Current Liabilities 125,000
Total equity and liabilities £600,000