Available for sale securities: These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity. To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

Question

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Answer 1

Question

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

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Answer 2

Question

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

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Answer 3

Question

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

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Answer 4

Question

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

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Answer 5

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

Answer 6

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

Answer 7

Chapter D, Problem D.8E

(1)

To determine

Available for sale securities:

These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assumed that no significant influence over Company M.

Answer 8

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

Answer 9

(2)

To determine

Equity method:

It is a method of reporting the equity investments. This method is used when an investor company is having the significant influence over the investee company that is Investor Company invests more than 20% but less than 50% in the equity of the investee company.

To record: the transactions from the purchase through the end of the year, including any adjustment for the investment's fair value, if appropriate. Assuming that Company F having a significant influence over Company M.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. D - Prob. 1RQ Ch. D - 2.How can an investor benefit from an equity...Ch. D - 3.How might investing activity for a company that...Ch. D - Provide an example of an equity investment in...Ch. D - Prob. 5RQ Ch. D - Prob. 6RQ Ch. D - Prob. 7RQ Ch. D - Prob. 8RQ Ch. D - Prob. 9RQ Ch. D - 10.When using the fair value method, we adjust the...

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Chapter D Solutions