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    Jerome Company purchased three non-trading equity investments on January 1, 2021 designated as FVOCI. Security A cost $1,000,000 plus $100,000 transaction costs and was worth $1,500,000 on December 31, 2021. Security B cost $2,000,000 plus $200,000 transaction costs and was worth $2,400,000 on December 31, 2021. Security C cost $4,000,000 plus $400,000 transaction costs and was worth $4,700,000 on December 31, 2021. Jerome Company sold Security C on July 1, 2022 for $5,200,000, resulting in a gain of $800,000 that should be recognized

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    Jerome Company purchased three non-trading equity investments on January 1, 2021 designated as FVOCI. Security A cost $1,000,000 plus $100,000 transaction costs and was worth $1,500,000 on December 31, 2021. Security B cost $2,000,000 plus $200,000 transaction costs and was worth $2,400,000 on December 31, 2021. Security C cost $4,000,000 plus $400,000 transaction costs and was worth $4,700,000 on December 31, 2021. Jerome Company sold Security C on July 1, 2022 for $5,200,000, resulting in a gain of $800,000 that should be recognized

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    11 views1 page

    Chapter 15 18

    Uploaded by

    jelou ubag
    Jerome Company purchased three non-trading equity investments on January 1, 2021 designated as FVOCI. Security A cost $1,000,000 plus $100,000 transaction costs and was worth $1,500,000 on December 31, 2021. Security B cost $2,000,000 plus $200,000 transaction costs and was worth $2,400,000 on December 31, 2021. Security C cost $4,000,000 plus $400,000 transaction costs and was worth $4,700,000 on December 31, 2021. Jerome Company sold Security C on July 1, 2022 for $5,200,000, resulting in a gain of $800,000 that should be recognized

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    © All Rights Reserved
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    CHAPTER 15-18

    On January 1, 2021, Jerome Company purchased nontrading equity investments which are designed
    at FVOCI:

    Purchase price Transaction cost Market value


    December 31, 2021
    Security A 1,000,000 100,000 1,500,000
    Security B 2,000,000 200,000 2,400,000
    Security C 4,000,000 400,000 4,700,000

    On July 1, 2022, the entity sold Security C for 5,200,000.

    What amount of gain on sale should be recognized directly in retained earnings? 800,000

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