7. QUESTION 5 The carrying value of available-for-sale debt and equity securities is a. the current market value b. the lower of cost or current market value C. historical cost d. the higher of cost of current market value QUESTION 6 Which of the following methods of accounting for investments is appropriate when 13 1. investee? a. cost method b.lower of cost or market method C. equity method d.consolidation QUESTION 7 1. Doug, Inc. used the equity method of accounting for its investment in Russ C the investment balance was $4,500 after all adjustments were recorded. The following is additional information: Doug's share of Russ' 2019 net inc Doug's share of 2019 depreciation of Russ equipment3%$100 Doug's dividends received from Russ in 2019=$700 What was the January 1, 2019 balance (beginning of the year) in Invest

7. QUESTION 5 The carrying value of available-for-sale debt and equity securities is a. the current market value b. the lower of cost or current market value C. historical cost d. the higher of cost of current market value QUESTION 6 Which of the following methods of accounting for investments is appropriate when 13 1. investee? a. cost method b.lower of cost or market method C. equity method d.consolidation QUESTION 7 1. Doug, Inc. used the equity method of accounting for its investment in Russ C the investment balance was $4,500 after all adjustments were recorded. The following is additional information: Doug's share of Russ' 2019 net inc Doug's share of 2019 depreciation of Russ equipment3%$100 Doug's dividends received from Russ in 2019=$700 What was the January 1, 2019 balance (beginning of the year) in Invest

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 5C: Available-for-Sale Securities The following are four unrelated situations involving investments in...

See similar textbooks

Similar questions

2. Each of the three categories of investments in debt and equity securities have similar accounting for all of the following transactions, except for a. initial recording of costb. recognition of dividend and interest incomec. recognition of realized gains or losses on salesd. recognition of unrealized holding gains and losses
nEED IN 10 MINUTES 9. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. On July 1, 2022, half of the securities are sold for P1,400,000. On July 1, 2022, the net increase/ decrease in retained earnings account is (sample answer: 10,500 increase or 10,500 decrease)
12. The costs of issuing debt securities in a business combination are expensed included in the initial measurement of the debt securities issued accounted for like a “discount" on liability Group of answer choices II and III I I, II and III II
13. For available-for-sale equity securities, receipt of a cash dividend would be reported as a. a reduction from retained earningsb. an increase in the investments available for sale accountc. a reduction in the investments available for sale accountd. dividend revenue
16. When the market value of a company's available-for-sale investments is lower than its cost, the difference should be a. reported as a liabilityb. reported in the footnotes to financial statementsc. deducted from the investment in available-for-sale securities accountd. added to the investment in available-for-sale securities account
10 - If a provision is made for TL 6,000 depreciation in stocks, what should be the debtor account? a) 654 Provision Expenses Hs. 6,000 TL B) 649 Other Ordinary Income and Profits Hs. 6,000 TL NS) 110 Stocks Hs. 6,000 TL D) 659 Other Ordinary Expenses and Losses Hs. 6,000 TL TO) 119 Provisions for Impairment of Securities (-) 6.000 TL
1) Equity securities can be classified as either current assets or long-term assets. Regardless of its classification, equity securities are always revalued to fair value at the end of the period. (True/False) 2) Debt securities which are classified as held-to-maturity securities are valued at amortized costs. Amortized costs is synonymous with carrying value and book value. (True/False) 3) ABC Company owns 60% of the stock of XYZ Company and prepares consolidated financial statements. The rationale for preparing consolidated financial statements is the economic entity assumption and comparability. (True/False) 4) XYZ Corporation declares and distributes a cash dividend that is a result of current earnings. Under both the fair value and equity method, the receipt of these dividends will be recorded as dividend revenue by the investor. (True/False) 5) The Fair Value Adjustment account has a normal debit balance. (True/False) 6) Cash dividends paid to preferred shareholders will…
12. All of the following statements regarding available-for-sale debt securities are true, except for a. premiums and discounts are amortizedb. interest revenue may be debited at the time of acquisitionc. the securities will be valued using the lower of cost or market methodd. realized gain or loss is the difference between the amortized cost of the bonds and theproceeds from their sale
Match each of the items below with its most appropriately-related “letter” classification. (“Letter” classification may be used more than once, or not at all.)A. Fair Value Adjustment G. Available-for-sale debt securities B. Statement of Cash Flows H. Equity holdings between 20% and 50% C. Trading debt securitiesI. Temporary differences, deferred tax assetD. Equity holdings less than 20% J. Permanent differences E. Held-to-maturity debt securities K. Temporary differences, deferred tax liability F. Statute of Limitations L. Equity holdings more than 50% ____ 1. Premiums paid on life insurance of officers (company is the beneficiary).____ 2. Amortized cost; unrealized holding gains or losses not recognized; interest when earned.____ 3. Consolidation of financial statements; parent and subsidiary company income or loss combined.____ 4. Estimated future warranty costs.____ 5. Represents the increase in taxes refundable (or saved) in future yearsas a result of deductible temporary…
3. Which of the following categories of investments are reported at their fair values on the balance sheet and have unrealized holding gains and losses included as a separate component of stockholders' equity? a. held-to-maturity debt securitiesb. marketable securitiesc. available-for-sale securitiesd. trading securities
estld-253754269&centerwin-yes O 710389- TR 1000 ed Question 3 of 25 The fair value of an investment is the price that Q Search OA. existed at the time of acquisition B. would be received if the company were to sell the investment on the market OC. is not relevant for trading debt investments O D. is always equal to the weighted average cost of the investment L ... hp T T W
37. When an entity reduces its interest in an investment in equity securities accounted for by the equity method and changes in to the fair value method. What is the initial measurement of the investment for purposes of subsequent changes in market value? a. Carrying amount at the date of changea. Original costb. Market value at the date of changec. Market value at the date of acquisition