ABC Corp. reported the following investment for its fiscal year ended on Dec 31, 2009:

Available-for-sale investments (at market value):

XYZ Corp. shares, 6,200 shares  $316,200

Unrealized holding loss re: XYZ Corp. shares $63,860.

Sold 4,000 XYZ shares for $47 per share on Feb 3, 2010 .On Dec  31, 2010, the  fair values is XYZ Corp. $53. What are the JEs during and at end

This is how  understand it

Cash         &n bsp;        188000 (4000*47)

      Investment in XYZ         &nb sp;    188000

To find the original cost : (316,200 + 63,860)/6200 = $61.3 per share

So, 4000 * 61.3 = 245200

To recyle loss from OCI to net income

Loss = 245200 - 188000 = 57200

Loss on sale of XYZ         &nb sp;    57200

       Holding loss on XYZ (OCI)         & nbsp;    57200     

I am not sure how to remove loss from OCI to Income statement for the investment sold, Is the above JE captures this. Help is appreciated.

Thanks

can you please post the entire question?

what are the pepper shares? Trading, AFS, or HTM?

generally when you reclassify from oci to income statement you have to reclassify the before tax amount, meaning if you had a $100,000 unrealized gain in OCI, net of tax effect on B/S would be @30% so $70,000.

to reclassify you would

dr OCI 100,000

     cr  realized gain $100,000

to reclassify the loss, it would be exact opposite.

I meant XYC and not Peper shares, here is the question again. I am not sure if I calcualted the loss correctly and the JEs are correct? Thanks

ABC Corp. reported the following investment for its fiscal year ended on Dec 31, 2009:

Available-for-sale investments (at market value):

XYZ Corp. shares, 6,200 shares  $316,200

Unrealized holding loss re: XYZ Corp. shares $63,860.

Sold 4,000 XYZ shares for $47 per share on Feb 3, 2010 .On Dec  31, 2010, the  fair values is XYZ Corp. $53 per share. What are the JEs during and at end

This is how  understand it

Cash         &n bsp;      188000 (4000*47)

      Investment in XYZ         &nb sp;  188000

To find the original cost : (316,200 + 63,860)/6200 = $61.3 per share

So, 4000 * 61.3 = 245200

Loss = 245200 - 188000 = 57200

To recyle loss from OCI to net income

Loss on sale of XYZ         &nb sp;  57200

       Holding loss on XYZ (OCI)         & nbsp;   57200     

I agree with your journal entries assuming you are using sfas 159

if your fair value at year end is $53 per share then:

at the beginning of the year the value was $316,200/6200= $51 per share.

so the remaining shares after the sale of 4,000 shares, 2,200 shares need to be marked up to end of year fair value of $53 per share and now you have a gain of $2 per share which is the difference between your $51 and new fv of $53 per share.

so

dr investment in XYZ $4,400

    cr unrealized holding gain OCI   $4,400

Thanks joe,

But would we not calculate gain/loss with respect to the original cost? I added the unrealized loss to the BS value of the investment to calcualte the origanal cost

(316,200 + 63,860)/6200 = $61.3 per share

or for Availble for sale we measure it from BS date?

Thanks