Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 12, Problem 12.15P
To determine
Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.
To Indicate: The way each of the investments given most likely should be accounted for based on the information provided
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Financial markets, Saving and Investment (chapter 13)
Q: Rank bonds, common stock, and preferred stock with regard to two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments.
Note Please Highly Requesting Do not Copy Paste Questions From Chegg, Or Coursehero .. I Have Chegg, Coursehero
ASSETS LIABILITIES AND CAPITALa. Current assets b. Investments c. Plant and equipment d. Intangiblese. Other assets f. Current liabilities g. Long-term liabilitiesh. Preferred stock i. Common stock j. Additional paid-in capitalk. Retained earningsl. Items excluded from balance sheetUsing the letters above, classify the following accounts according to the preferred and ordinary
balance sheet presentation.
_____ 1. Bond sinking fund_____ 2. Common stock distributable_____ 3. Appropriation for plant expansion_____ 4. Bank overdraft_____ 5. Bonds payable (due 2010)_____ 6. Premium on common stock_____ 7. Securities owned by another company which are collateral for that company's note_____ 8. Trading securities_____ 9. Inventory_____ 10. Unamortized discount on bonds payable_____ 11. Patents_____ 12. Unearned revenue
Categorize each of the nine different sources of risk according to the investment class to which it applies. If the risk applies to both stocks and bonds then categorize it as "both."
Question content area bottom
Part 1
Interest rate risk applies to:
A.
stocks only.
B.
bonds only.
C.
both stocks and bonds.
Chapter 12 Solutions
Intermediate Accounting, 10 Ed
Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5QCh. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Under IFRS No. 9, which reporting categories are...Ch. 12 - Prob. 12.12QCh. 12 - Do U.S. GAAP and IFRS differ in the amount of...Ch. 12 - Under what circumstances is the equity method used...Ch. 12 - The equity method has been referred to as a...Ch. 12 - In the application of the equity method, how...Ch. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - How does IFRS differ from U.S. GAAP with respect...Ch. 12 - What is the effect of a company electing the fair...Ch. 12 - Define a financial instrument. Provide three...Ch. 12 - Some financial instruments are called derivatives....Ch. 12 - (Based on Appendix 12A) Northwest Carburetor...Ch. 12 - Prob. 12.25QCh. 12 - Prob. 12.26QCh. 12 - (Based on Appendix 12B) Reporting an investment at...Ch. 12 - Prob. 12.28QCh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.20BECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.15PCh. 12 - Prob. 12.2DMPCh. 12 - Prob. 12.4DMPCh. 12 - Continuing Cases Target Case LO12-4, LO12-6...
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- Which of the following can be categorized as Short term sources of finance ?i Equity Sharesii Trade Creditiii Debentureiv Money Market Instruments a.Only Equity Shares b.Both Equity Shares and Debentures c.Only Money Market Instruments d.Both Money Market Instruments and Trade Creditarrow_forwardFor the first Q you can choose more than one Question 1 Which investments require fair value adjustments at the close of the period? Question 1 options: Trading Securities Equity Securities Held to Maturity Securities Available for Sale Securities Question 2 What is the most important factor in determining the accounting for investments? Question 2 options: Whether the investment is debt or equity The timed planned of conversion The percentage of ownership in the investee Question 3 When using the equity method of accounting, we credit which account when we receive a dividend? Question 3 options: Cash Dividend income Dividend revenue Investment Question 4 Held to maturity securities, trading securities, and available for sale securities can all be either debt or equity. Question 4 options: True False Question 5 Question 5 options: If we own between........ and....... %, we must use the equity…arrow_forwardFor investments in equity securities, which will result in recording income based on the income of the investee? Select one: a. Held-to-maturity classification b. Trading classification O C. Available-for-sale classification O d. Equity method of accountingarrow_forward
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