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Concept explainers
Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.
Held-to-maturity security: The debt securities which are held by the investor with intent to hold the investment till its maturity, are referred to as held-to-maturity securities.
Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment.
Other Comprehensive income (OCI): OCI includes all financial items which result in changes in the
Comprehensive income: The total of net income and other comprehensive income (OCI) is referred to as comprehensive income. Comprehensive income should be reported on income statement, and statement of comprehensive income.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To Indicate: The effect of the following scenarios on the 2018 Income Statement of Company B.
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Chapter 12 Solutions
Intermediate Accounting
- How much should be recorded on December 31 for the gain or loss?arrow_forwardWhat is the gross income for the year?arrow_forwardAt the beginning of the recent period there were 1,080 units of product in a department, one-third completed. These units were finished and an additional 5,620 units were started and completed during the period. 960 units were still in process at the end of the period. One-fourth completed. Using the weighted-average valuation method the equivalent units produced by the department were____Units.arrow_forward
- What percent are variable costs of sales?arrow_forwardAt the beginning of the recent period there were 1,080 units of product in a department, one-third completed. These units were finished and an additional 5,620 units were started and completed during the period. 960 units were still in process at the end of the period. One-fourth completed. Using the weighted-average valuation method the equivalent units produced by the department were____Units. Right Answerarrow_forwardWhat is total gross income for the year?arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
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