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- In a stock acquisition accounted for by the equity method, a portion of the purchase price often is attributed to goodwill or to specific assets or liabilities. How are these amounts determined at acquisition? How are these amounts accounted for in subsequent periods?When an investment is acquired, what is the initial reporting basis for all investments in equity securities? Group of answer choices: a) Fair market value b) Equity value c) Discounted present value d) CostWhich of the following accounting methods is used to account for controlling interest investments? A. cost method B. discounted cash flow method C. consolidation method D. acquisition metho
- Compute the initial measurement of the bonds on acquisitionAssuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: Determine the initial valuation of the investment.Describe the equity method and the cost method of investor accounting for acquisitions
- 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 acquisitionFor fi nancial assets classifi ed as trading securities, how are unrealized gains and losses refl ected in shareholders’ equity? C . Th ey are a component of accumulated other comprehensive income.The realized gain (loss) on sale of debt investments with an objective of collecting contractual cash flows and to sell when circumstances warrants is the difference of the net selling price and the fair value of the bonds. Group of answer choices False True
- An unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.When convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be ________. treated as a prior period adjustment treated as an adjustment of additional paid-in-capital reflected currently in incomeThe cost of registering equity securities in a business combination should be capitalized debited to share premium expensed
