The type of companies does Incorporation BH own.

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Answer 1

Question

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

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The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020 and that Mulatto Company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information which is grouped according to your surname name initial. Issued 5000 shares of common stock. Stock has par value of $0.01per share and was issued at $30 per share. Issued 2000 shares of preferred stock at par value as payment in exchange for legal services. Exchanged 100,000 shares of common stock for land with an appraised value of $250,000 and a building with an appraised value of $450,000. Earned Net income $500,000. Paid dividends to preferred shareholders as well as $2 per…

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Answer 2

Question

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

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Answer 3

Question

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

Expert Solution & Answer

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See solution

Answer 5

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

Answer 6

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

Answer 7

Chapter 10, Problem 10.1CTTP

1.

To determine

To identify: The type of companies does Incorporation BH own.

Answer 8

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

Answer 9

2.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Available-for-sale investments:

Available-for-sale investments are the investments in debt or equity securities, where the investor wishes to holds less than 20% of voting stock, and neither referred as trading or hold-to-maturity investments. For debt securities, the investor do not wish to hold it till maturity, and hence reported either as current assets or as long-term assets in the balance sheet depending upon the holding period of the security.

The amounts which the Incorporation BH holds in available-for-sale, and held-to-maturity investments.

Answer 10

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

Answer 11

3.

To determine

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

To identify: Each item related to the company’s debt and equity security investments, the amount of the item, and the section of the cash flow statement in which the item appears.

Answer 12

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

Answer 13

4.

To determine

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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The type of companies does Incorporation BH own.

Solution Summary: The author identifies the types of companies that Incorporation BH owns, including property and casualty insurance and reinsurance, freight rail transportation, utilities and energy, finance, manufacturing, services, and retailing.

To identify: The type of companies does Incorporation BH own.

To identify: The manner in which the Incorporation BH uses fair value measurements in regard to its investments.

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