During 2007, Ellis Company purchased 20,000 shares of Hiller Corp. common stock for $315,000 as an available-for-sale investment. The fair value of these shares was $300,000 at December 31, 2007. Ellis sold all of the Hiller stock for $17 per share on December 3, 2008, incurring $14,000 in brokerage commissions. What should Ellis Company should report a realized gain on the sale of stock in 2008?
What types of journal entries may be required when converting foreign currencies in financial records? Provide examples of the types of entries and when they might be used. (Ch. 6 of Advanced Accounting)
What are the two methods used to convert trial balances from foreign currencies into U.S. dollars? Describe the situations when you would use each method. (Ch. 6 of Advanced Accounting)
What are the disclosure requirements for traditional and derivative financial instruments? Should companies disclose if such instruments are used for hedging or speculation? Why? (Appendix 17A of Intermediate Accounting)
A derivative instrument derives its value from the value of another financial instrument. For example, a stock option or an interest rate swap. A traditional instrument value is determined by the markets (securities, loans, and deposits). Companies should definitely disclose if the instruments are used for hedging or speculation, becau