Fakultas Program Studi Tatap Muka Kode MK Disusun Oleh

Bisnis dan Ekonomi Akuntansi 01710012 Dudi Abdul Hadi, H, SE, M.Si., Ak

13
TUGAS PERKULIAHAN
AKUNTANSI KEUANGAN

Judul Tugas Investments

Deskripsi
Mahasiswa mampu dengan tepat menjelaskan mengenai
Investments
Ketentuan
▪ Tugas bersifat openbook

▪ Diperbolehkan bertanya tetapi tidak diperbolehkan minta dibuatkan

Abstract
Luaran/Output

Mahasiswa mampu membuat contoh Investments

Jadwal

Tugas dikumpulkan pada saat jam pelajaran

Penilaian Bobot

Bobot nilai yang digunakan adalah A – F dengan nilai tertinggi adalah

A dan terendah adalah F

Kriteria

1. Kesesuaian dan ketepatan format

2. Kecepatan Penyerahan Tugas

Daftar Pustaka 1. Financial accounting ninth edition wygandt kimmel, kieso

TUGAS

JAWAB PERTANYAAN-PERTANYAAN DI BAWAH INI DALAM WORD

ATAU KERTAS TERTULIS

Multiple Choices
1. Which of the following is not a primary reason why corporations invest in debt and equity
securities?
(a) They wish to gain control of a competitor.
(b) They have excess cash.
(c) They wish to move into a new line of business.
(d) They are required to by law.
2. Debt investments are initially recorded at:
(a) cost.
(b) cost plus accrued interest.
(c) fair value.
(d) face value.
3. Hanes Company sells debt investments costing $26,000 for $28,000. In journalizing the
sale, credits are to:
(a) Debt Investments and Loss on Sale of Debt Investments.
(b) Debt Investments and Gain on Sale of Debt Investments.
(c) Stock Investments and Gain on Sale of Stock Investments.
(d) No correct answer is given.
4. Pryor Company receives net proceeds of $42,000 on the sale of stock investments that
cost $39,500. This transaction will result in reporting in the income statement a:
(a) loss of $2,500 under “Other expenses and losses.”
(b) loss of $2,500 under “Operating expenses.”
(c) gain of $2,500 under “Other revenues and gains.”
(d) gain of $2,500 under “Operating revenues.”
5. The equity method of accounting for long-term investments in stock should be used when
the investor has signifi cant infl uence over an investee and owns:
(a) between 20% and 50% of the investee’s common stock.
(b) 20% or more of the investee’s common stock.
(c) more than 50% of the investee’s common stock.
(d) less than 20% of the investee’s common stock.
6. Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on
January 1, 2015, for $300,000. During 2015, Sheboygan Corp. reported net income of
$160,000 and paid total dividends of $60,000. If Horicon uses the equity method to
account for its investment, the balance in the investment account on December 31, 2015,
will be:
(a) $300,000. (c) $400,000.
(b) $325,000. (d) $340,000.
7. Using the information in Self-Test Question 6, what entry would Horicon make to record
the receipt of the dividend from Sheboygan?
(a) Debit Cash and credit Revenue from Stock Investments.
(b) Debit Cash Dividends and credit Revenue from Stock Investments.
 (c) Debit Cash and credit Stock Investments.
(d) Debit Cash and credit Dividend Revenue.
8. You have a controlling interest if:
(a) you own more than 20% of a company’s stock.
(b) you are the president of the company.
(c) you use the equity method.
(d) you own more than 50% of a company’s stock.
9. Which of the following statements is false? Consolidated fi nancial statements are useful
to:
(a) determine the profi tability of specifi c subsidiaries.
(b) determine the total profi tability of companies under common control.
(c) determine the breadth of a parent company’s operations.
(d) determine the full extent of total obligations of companies under common control.
10. At the end of the fi rst year of operations, the total cost of the trading securities
portfolio is $120,000. Total fair value is $115,000. The fi nancial statements should show:
(a) a reduction of an asset of $5,000 and a realized loss of $5,000.
(b) a reduction of an asset of $5,000 and an unrealized loss of $5,000 in the stockholders’
equity section.
(c) a reduction of an asset of $5,000 in the current assets section and an unrealized loss
of $5,000 in “Other expenses and losses.”

Questions
1. What are the reasons that corporations invest in securities?
2. (a) What is the cost of an investment in bonds? (b) When is interest on bonds recorded?
3. Alex Ramirez is confused about losses and gains on the sale of debt investments. Explain
to Alex
(a) how the gain or loss is computed, and (b) the statement presentation of the gains and
losses.
4. Seibel Company sells Mayo’s bonds costing $40,000 for $45,000. Seibel records a $5,000
gain on this sale. Is this correct? Explain.
5. What is the cost of an investment in stock?
6. To acquire Peoples Corporation stock, J. Rich pays $62,000 in cash. What entry should be
made for this investment?
7. (a) When should a long-term investment in common stock be accounted for by the equity
method?
(b) When is revenue recognized under this method?
8. Ling Corporation uses the equity method to account for its ownership of 35% of the
common stock of Gorman Packing. During 2015, Gorman reported a net income of
$80,000 and declares and pays cash dividends of $10,000. What recognition should Ling
Corporation give to these events?
9. What constitutes “signifi cant infl uence” when an investor’s fi nancial interest is below
the 50% level?
10. Distinguish between the cost and equity methods of accounting for investments in
stocks.

Brief Answer
BE-1 Ownbey Corporation purchased debt investments for $52,000 on January 1, 2015. On
July 1, 2015, Ownbey received cash interest of $2,340. Journalize the purchase and the
receipt of interest. Assume that no interest has been accrued.
BE-2 On August 1, Shaw Company buys 1,000 shares of Estrada common stock for $37,000
cash. On December 1, Shaw sells the stock investments for $40,000 in cash. Journalize the
purchase and sale of the common stock.
BE-3 Noler Company owns 25% of Lauer Company. For the current year, Lauer reports net
income of $180,000 and declares and pays a $50,000 cash dividend. Record Noler’s equity
in Lauer’s net income and the receipt of dividends from Lauer.
BE-4 The cost of the trading securities of Munoz Company at December 31, 2015, is
$64,000. At December 31, 2015, the fair value of the securities is $59,000. Prepare the
adjusting entry to record the securities at fair value.
BE-5 For the data presented in BE12-4, show the fi nancial statement presentation of the
trading securities and related accounts.
BE-6 Godfrey Corporation holds, as a long-term investment, available-for-sale securities
costing $72,000. At December 31, 2015, the fair value of the securities is $68,000. Prepare
the adjusting entry to record the securities at fair value.

EXERCISES
E-1 Mr. Taliaferro is studying for an accounting test and has developed the questions below
and on page 632 about investments.
1. What are three reasons why companies purchase investments in debt or stock securities?
2. Why would a corporation have excess cash that it does not need for operations?
3. What is the typical investment when investing cash for short periods of time?
4. What are the typical investments when investing cash to generate earnings?
5. Why would a company invest in securities that provide no current cash fl ows?
6. What is the typical stock investment when investing cash for strategic reasons?
Instructions
Provide answers for Mr. Taliaferro.

E-2 Jenek Corporation had the following transactions pertaining to debt investments.
Jan. 1 Purchased 50 9%, $1,000 Leeds Co. bonds for $50,000 cash. Interest is payable
semiannually on July 1 and January 1.
July 1 Received semiannual interest on Leeds Co. bonds.
July 1 Sold 30 Leeds Co. bonds for $33,000.
Instructions
(a) Journalize the transactions.
(b) Prepare the adjusting entry for the accrual of interest at December 31.

E-3 Flynn Company purchased 70 Rinehart Company 12%, 10-year, $1,000 bonds on
January 1, 2015, for $70,000. The bonds pay interest semiannually on July 1 and January
1. On January 1, 2016, after receipt of interest, Flynn Company sold 40 of the bonds for
$38,500.
Instructions
Prepare the journal entries to record the transactions described above.
E-4 Hulse Company had the following transactions pertaining to stock investments. Feb. 1
Purchased 600 shares of Wade common stock (2%) for $7,200 cash.
July 1 Received cash dividends of $1 per share on Wade common stock.
Sept. 1 Sold 300 shares of Wade common stock for $4,300.
Dec. 1 Received cash dividends of $1 per share on Wade common stock.
 Instructions
(a) Journalize the transactions.
(b) Explain how dividend revenue and the gain (loss) on sale should be reported in the
income statement.
E-5 Nosker Inc. had the following transactions pertaining to investments in common stock.
Jan. 1 Purchased 2,500 shares of Escalante Corporation common stock (5%) for $152,000
cash.
July 1 Received a cash dividend of $3 per share.
Dec. 1 Sold 500 shares of Escalante Corporation common stock for $32,000 cash.
Dec. 31 Received a cash dividend of $3 per share.
Instructions
Journalize the transactions.

PROBLEMS
P-1A Vilander Carecenters Inc. provides fi nancing and capital to the health-care industry,
with a particular focus on nursing homes for the elderly. The following selected transactions
relate to bonds acquired as an investment by Vilander, whose fi scal year ends on December
31.
2015
Jan. 1 Purchased at face value $2,000,000 of Javier Nursing Centers, Inc., 10-year, 8% bonds
dated January 1, 2015, directly from Javier.
July 1 Received the semiannual interest on the Javier bonds.
Dec. 31 Accrual of interest at year-end on the Javier bonds.
(Assume that all intervening transactions and adjustments have been properly recorded and
that the number of bonds owned has not changed from December 31, 2015, to December 31,
2017.)
2018
Jan. 1 Received the semiannual interest on the Javier bonds.
Jan. 1 Sold $1,000,000 Javier bonds at 106.
July 1 Received the semiannual interest on the Javier bonds.
Dec. 31 Accrual of interest at year-end on the Javier bonds.
Instructions
(a) Journalize the listed transactions for the years 2015 and 2018.
(b) Assume that the fair value of the bonds at December 31, 2015, was $2,200,000. These
bonds are classifi ed as available-for-sale securities. Prepare the adjusting entry to record
these bonds at fair value.
(c) Based on your analysis in part (b), show the balance sheet presentation of the bonds and
interest receivable at December 31, 2015. Assume the investments are considered longterm.
Indicate where any unrealized gain or loss is reported in the fi nancial statements.

P-2A In January 2015, the management of Kinzie Company concludes that it has sufficient
cash to permit some short-term investments in debt and stock securities. During the year, the
following transactions occurred.
Feb. 1 Purchased 600 shares of Muninger common stock for $32,400.
Mar. 1 Purchased 800 shares of Tatman common stock for $20,000.
Apr. 1 Purchased 50 $1,000, 7% Yoakem bonds for $50,000. Interest is payable semiannually
on April 1 and October 1.
July 1 Received a cash dividend of $0.60 per share on the Muninger common stock.
Aug. 1 Sold 200 shares of Muninger common stock at $58 per share.
Sept. 1 Received a $1 per share cash dividend on the Tatman common stock.
Oct. 1 Received the semiannual interest on the Yoakem bonds.
Oct. 1 Sold the Yoakem bonds for $49,000.
At December 31, the fair value of the Muninger common stock was $55 per share. The fair
value of the Tatman common stock was $24 per share.
Instructions
(a) Journalize the transactions and post to the accounts Debt Investments and Stock
Investments. (Post in T-account form.)
(b) Prepare the adjusting entry at December 31, 2015, to report the investments at fair value.
All securities are considered to be trading securities.
(c) Show the balance sheet presentation of investments at December 31, 2015.
(d) Identify the income statement accounts and give the statement classifi cation of each
account.