Nichols Enterprises has an investment in 27,000 bonds of Elliott Electronics that Nichols accounts for as a security available-for-sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $24 per bond. Nichols should carry the Elliott investment on its balance sheet at: A) Either $378,000 or $648,000, as either are defensible valuations. B) $648,000. C) $378,000. D) $513,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott.

Nichols Enterprises has an investment in 27,000 bonds of Elliott Electronics that Nichols accounts for as a security available-for-sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $24 per bond. Nichols should carry the Elliott investment on its balance sheet at: A) Either $378,000 or $648,000, as either are defensible valuations. B) $648,000. C) $378,000. D) $513,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott.

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 10RE: On September 30, Franz Corporation notices a decline in value of its investment in held-to-maturity...

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Rupar Financial has an investment in 33,000 bonds of Anand Company that Rupar accounts for as a security available-for-sale. Anand bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Rupar believes the market does not appreciate the full value of the Anand bonds and that a more accurate price is $24 per bond. Rupar should carry the Anand investment on its balance sheet at: Multiple Choice $627,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott. $792,000. $462,000. Either $462,000 or $792,000, as either are defensible valuations.
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