Classifying Investments in SecuritiesMatch each security listed below with its usual classification: (1) trading securities, (2) available-for-sale securities, (3) equity method securities, (4) held-to-maturity securities, or (5) equity securities measured at FV-NI. a. Abbot common stock, no-par; acquired to use temporarily idle cash with intent to sell next month. b. 30% interest in Packaging Inc.; acquired to drive costs down through vertical integration. c. Mack stock held in trading account. d. Hasten Inc.'s 10-year bonds acquired. Hasten intends to hold to maturity, but may need to sell the bonds earlier for cash. e. Staufer common stock, par $5; acquired to gain a significant influence, but not control. f. Frazer bonds, 9% mature at the end of 10 years; acquired with the intent and ability to hold for 10 years. g. Foreign Corp. common stock; a 30% interest acquired, but difficulties encountered in an attempt to obtain representation on the Foreign Corporation's board of directors. Intent is to hold stock indefinitely. h. Astroid common stock, par $1; acquired as an investment (with insignificant influence) that management plans to hold indefinitely.PreviousSave AnswersNext

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 18E: Trading Securities Pear Investments began operations in 2020 and invests in securities classified as...

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Classifying Investments in Securities

Match each security listed below with its usual classification: (1) trading securities, (2) available-for-sale securities, (3) equity method securities, (4) held-to-maturity securities, or (5) equity securities measured at FV-NI.

	a. Abbot common stock, no-par; acquired to use temporarily idle cash with intent to sell next month.
	b. 30% interest in Packaging Inc.; acquired to drive costs down through vertical integration.
	c. Mack stock held in trading account.
	d. Hasten Inc.'s 10-year bonds acquired. Hasten intends to hold to maturity, but may need to sell the bonds earlier for cash.
	e. Staufer common stock, par $5; acquired to gain a significant influence, but not control.
	f. Frazer bonds, 9% mature at the end of 10 years; acquired with the intent and ability to hold for 10 years.
	g. Foreign Corp. common stock; a 30% interest acquired, but difficulties encountered in an attempt to obtain representation on the Foreign Corporation's board of directors. Intent is to hold stock indefinitely.
	h. Astroid common stock, par $1; acquired as an investment (with insignificant influence) that management plans to hold indefinitely.

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