HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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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
The following data pertains to Traverse Co.'s investments in marketable equity securities:
Select one:
Oa. $55,000 gain
O b. $55,000 loss
c. $50,000 loss
Od $50,000 gain
Oe $0
Cost
$150,000
Clear my choice
Market value
12/31/24
$155,000
12/31/25
What amount should Traverse Co. report as unrealized holding gain/loss to be included in 2025 Comprehensive Income?
$100,000
Chapter 10 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
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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- Equity securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses as part of the net income are: Securities where a company has holdings of between 20% and 50% Securities where a company has holding of less than 20% O Available-for-sale securities where a company has holdings of less than 20% O Securities where a company has holdings of more than 50%arrow_forwardBased 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%.arrow_forward1. The cost method of accounting for stock investments is used when the company acquires a. Greater than 50% of the company's stock b. Between 20% to 50% of the company's stock c. Less than 20% of the company's stock 2. The significance of percentage of ownership relates to how much _____________ the acquiring company has in the new company. a. data b. control c. confidencearrow_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 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
- Explain what method is used to account for investments in equity securities with 20% to 50% ownership. Briefly describe how dividends received and share of net income are accounted for under this methodarrow_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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