Sony Corporation was organized in 1946 under the name Toky
Question and Solution
Sony Corporation was organized in 1946 under the name Tokyo Tsushin Kogyo. The name “Sony” was given to a small transistor radio sold by the company in the United States. The radio was so popular that the entire company changed its name to Sony in 1958. In its 2008 and 2007 annual reports, Sony included these notes to its financial statements.
1. In the notes to its English-language financial statements, Sony states that those statements are prepared “in conformity with U.S. GAAP.” However, Sony’s official accounting records are maintained using Japanese accounting principles. Why would Sony go to the trouble of preparing a separate set of English-language financial statements using U.S. accounting principles? 2. Assuming that approximately the same available-for-sale securities were on hand in both 2007 and 2008, how well did Sony’s investments perform in 2008? 3. What journal entries did Sony make during the year to record the revaluation of available-for-sale securities? Use only the total amounts (that is, don’t use the separate amounts for debt and equity securities), and ignore the fact that securities were bought and sold during theyear.