Financial Accounting - Access
4th Edition
ISBN: 9781259958533
Author: SPICELAND
Publisher: MCG
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Students have asked these similar questions
If an investor invested OMR 10,000 in Equity Share and OMR 8,000 in Bonds of an SAOG company in Muscat Stock Exchange and unfortunately that company is closing down / getting liquidated due to its mismanagement of funds.
With the above information, how much money does he recovered from his investments if the company is settling only debt?
Select one:
A.
OMR 18,000
B.
OMR 2,000
C.
OMR 10,000
D.
OMR 8,000
Lancaster Corporation, an investment banking company, often has extra cash to invest. Suppose Lancaster buys500 shares of Knight Corporation stock at $40 per share, representing less than 5% of Knight’soutstanding stock. Lancaster expects to hold the Knight stock for one month and then sell it.The purchase occurs on December 15, 2018. On December 31, the market price of one share ofKnight stock is $47 per share.Requirements1. What type of investment is this for Lancaster? Give the reason for your answer.2. Record Lancaster’s purchase of the Knight stock on December 15 and the adjustment tomarket value on December 31.3. Show how Lancaster would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018
Amherst Corporation, an investment banking company, often has extra cash to invest. Suppose Amherst buys900 shares of Hurricane Corporation stock at $57 per share, representing less than 5% ofHurricane’s outstanding stock. Amherst expects to hold the Hurricane stock for one month andthen sell it. The purchase occurs on December 15, 2018. On December 31, the market price of ashare of Hurricane stock is $58 per share.Requirements1. What type of investment is this for Amherst? Give the reason for your answer.2. Record Amherst’s purchase of the Hurricane stock on December 15 and the adjustment tomarket value on December 31.3. Show how Amherst would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018.
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- Please answer with reason for all why the option is correct and why the other options are incorrect 12. During the year, a not-for-profit entity received $30,000 in dividends and $24,000 in interest on its investment portfolio. The entity also accrued $6,000 in interest on the portfolio. The increase in fair value of the portfolio during the year was $8,000. How much should the entity report for investment earnings during the year? A. $62,000. B. $0. C. $60,000. D. $54,000.arrow_forwardWhich investor would not qualify as "Accredited"? Group of answer choices A.The CFO of the company issuing the security B. An MBA graduate and CPA who now was a net worth of $500,000 through shrewd investments in the last 3 months C. A recent retiree who saved a little over $1M in their 401k during their career D. A university endowmentarrow_forwardVande Velde Company made three investments during 2020. (1) It purchased 1,000 shares of Sastre Company, a start-up company. Vande Velde made the investment based on valuation estimates from an internally developed model. (2) It purchased 2,000 shares of GE stock, which trades on the NYSE. (3) It invested $10,000 in local development authority bonds. Although these bonds do not trade on an active market, their value closely tracks movements in U.S. Treasury bonds. Where will Vande Velde report these investments in the fair value hierarchy?arrow_forward
- In the Republic of Atlantis the regulators decide to allow private placement of equity (see problem set 2 extra questions). A firm called Fish Inc. currently trades in their stock market at a price of $3 (Atlantic dollars) with 100 million shares outstanding. The manager currently needs to raise extra $300m. They decide to do that in a private placement and sell the shares to an individual investor at a discount of 20% of current share price. Which of the following statements is (are) true: (i) Private placements are fair. (ii) The company will issue 125m extra shares. (iii) Pre-existing investors will lose $34p per share.Required to answer. Single choice.arrow_forwardthe bold is my own work which i am not 100% on. i feel as if the investment account entries are wrong and that when i have to do the dividend income entry for the third year (25% investment) it should be different. Please help. On 1/1/20x1, Living Technologies Company purchased an investment in the voting common stock of Home Solutions, Inc. for $100,000 cash. With its investment, Living Technologies Company did not retain significant influence over the financing and operating policies of Home Solutions. Home Solutions, Inc.’s common stock is held by a small group of related investors and the fair value of that common stock is difficult to determine. But, based on the number of Home Solutions common shares outstanding, at 1/1/20x1, Living Technologies’ investment represents 10% of Home Solutions outstanding common shares. On 1/1/20x3, Living Technologies Company purchased an additional 15% of Home Solutions, Inc.’s outstanding voting common stock. The cost of their…arrow_forwardOn March 1, 2024, Garden Company invests $13,000 in Firs, Inc. stock. Firs pays Garden a $200 dividend on August 1, 2024. Garden sells the Firs' stock on August 31, 2024, for $13,350. Assume the investment is categorized as a short-term equity investment and Garden Company does not have significant influence over Firs, Inc 1. Journalize the transactions for Garden's investment in Firs' stock. 2. What was the net effect of the investment on Garden's net income for the year ended December 31, 2024arrow_forward
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