Horngren's Financial & Managerial Accounting
7th Edition
ISBN: 9780136503743
Author: MILLER-NOBLES
Publisher: RENT PEARS
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Textbook Question
Chapter 10, Problem 2QC
Which of the following investments is most likely classified as a held-to-maturity investment?
a. 80% stock ownership in a subsidiary
b. 100% ownership in voting stock of a supplier
c. 10-year bonds
d. None of the above
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Which of the following investments is most likely classified as a held-to-maturity investment?
80% stock ownership in a subsidiary
100% ownership in the voting stock of a supplier
10-year bonds
None of the above
Which of the following stock investments should be accounted for using the fair value method?
a.investments between 20% and 50% ownership
b.investments of less than 20% ownership
c.investments of over 50% ownership
d.all investments of less 50% ownership
Based on the presumption in IAS 27, the cost method is applied for equity securities when the percentage of ownership of another company is:
Select one:
A. 20% to 50%.
B. Exactly 100%.
C. Less than 20%.
D. Over 50%.
Chapter 10 Solutions
Horngren's Financial & Managerial Accounting
Ch. 10 - Prob. 1QCCh. 10 - Which of the following investments is most likely...Ch. 10 - If Intervale Railway invests 100,000 in 5% bonds...Ch. 10 - Prob. 4QCCh. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Harvard Co. purchased a trading investment on...Ch. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - What is a debt security?Ch. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Briefly describe the five specific types of debt...Ch. 10 - How is the purchase of a held-to-maturity debt...Ch. 10 - Prob. 6RQCh. 10 - What method is used for investments in equity...Ch. 10 - What method is used for investments in equity...Ch. 10 - What adjustment must be made at the end of the...Ch. 10 - Where on the financial statements is an unrealized...Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - What does the rate of return on total assets...Ch. 10 - Identifying why companies invest and classifying...
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- For investment in equity securities carried as FVOCI under PFRS 9, the difference between the carrying value of the investment and its related cumulative unrealized gain or loss-OCI is * A. its unrealized gain or loss reported as a component of OCI for the period B. Its amortized cost C. its initial cost D. its unrealized gain or loss reported under profit or loss for the period A gain or loss arising on the initial recognition of biological assets and from a change in the fair value less costs to sell of a biological asset shall be included in: * A. Profit or loss for the period B. Other comprehensive income C. A separate revaluation reserve D. Either in the profit or loss or the other comprehensive income for the period The following items are generally classified as plant assets, except: a. Improvements to leased facilities b. Property held for future plant sites c.…arrow_forwardAn equity investment in less than 20% of another companys outstanding stock is accounted for using the fair value method.Answer:TrueFalsearrow_forward50Equity securities acquired by a corporation which are accounted for by reporting unrealized holding gain/loss in the equity section of the statement of financial position. a. Investment at FVPL where a company has holdings of less than 20% b. Investment at FVOCI where a company has holdings of less than 20% c. Investment where a company has holdings of between 20% and 50% d. Investment where a company has holdings of more than 50%arrow_forward
- For investment in equity securities carried as FVOCI under PFRS 9, the difference between the carrying value of the investment and its related cumulative unrealized gain or loss-OCI is A. its unrealized gain or loss reported as a component of OCI for the period. B. its unrealized gain or loss reported under profit or loss for the period. C. its initial cost D. Its amortized costarrow_forwardWhen 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) Costarrow_forwardAssume ABC corp is selling 10-year bonds to raise capital. This transaction would A. decrease ABC's debt B. increase ABC's debt OC. increase ABC's equity OD. decrease ABC's equityarrow_forward
- If the combined market value of equity investment at fair value through profit or loss at the end of the year is more than the market value of the same portfolio of trading securities at the beginning of the year, the difference should be accounted for by: a debit to equity investment O reporting an unrealized loss in security investment in the stockholders' equity section of the balance sheet a footnote to the financial statements reporting an unrealized loss in security investments in the income statement O reporting an unrealized gain in security investments in the income statementarrow_forwardWhich of the following may qualify as cash equivalents? O Investment in preference shares acquired within a short period of their maturity and with a specified redemption date O None of these O Investment in share options O Investment in ordinary sharesarrow_forward23. In accounting for minority passive equity investments, the unrealized holding gain or loss on equity securities is recorded on: Multiple Choice the balance sheet as a deferred charge in the period of the security price change. the balance sheet as a separate component of stockholders’ equity. the income statement in the period of the security price change. the income statement in the period after the security price change.arrow_forward
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