The classification and therefore subsequent measurement of financial assets depends on.?Select one:O a. The business model of the reporting entity considering management's intention of holding the portfolio of financial assets.O b. The specifications of the external auditors.O c Maturity and cash flows received on maturity of the financial assetsO d. The amount and terms of payment for the purchase of the financial assets.CLimited is a stock broking firm in the business of buying and selling shares on the JSE (Johannesburg Securities Exchange) on behalf of its clientsand on its own behalf. On 1 December 2015, C Limited bought, on its own account, 10 000 shares of D Limited when the market price was R40. Theshare price of D Limited rose drastically to R60 and on 31 March 2016, C Limited sold 5 000 of the D Limited shares.Assuming that the year-end of C Limited is 31 March each year and that the corporate tax rate is 28% for 2016 and that only 70% of capital gainsare taxable, answer the questions that follow.What amount will be recorded on the statement of financial position as investment in D Limited (financial asset) as at 31 March 2016?Select one:O a. R400 000O b. R200 000O c. R600 000O d. R300 000Which of the following statements are correct regarding dividends component in the purchase price of shares?O The fair value of a share purchased cum-dividend is the quoted price of the share on the stock market.(m) The fair value of a share purchased cum-dividend is the quoted price of the share on the stock market less dividend portion in the share price(ii) The fair value of a share purchased ex-dividend is the quoted price on the stock market.(m) The dividend component has no influence in the accounting treatment of the investment in the sharesSelect one:O a. (1) and (iv) onlyO b. (). (i). (ii) and (iv)O c (). (i) and (ii) onlyO d. (ii) and (i) only

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The classification and therefore subsequent measurement of financial assets depends on.? Select one: O a The business model of the reporting entity considering management's intention of holding the portfolio of financial assets. O b. The specifications of the external auditors. O . Maturity and cash flows received on maturity of the financial assets O d. The amount and terms of payment for the purchase of the financial assets.

The classification and therefore subsequent measurement of financial assets depends on.? Select one: O a The business model of the reporting entity considering management's intention of holding the portfolio of financial assets. O b. The specifications of the external auditors. O . Maturity and cash flows received on maturity of the financial assets O d. The amount and terms of payment for the purchase of the financial assets.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 26BE

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