Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 16, Problem 16.6MC
To determine
To identify: The correct option
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Waterton Corporation reported that short-term investments in debt securities consisted of the following (in millions):
Amortized Cost Fair Value December 31 Short-term investments available - for - sale debt securities $1,373.6 $1,373.8
Short-term investments-trading debt securities 161.8 132.0 Total short-term investments $1,535.4 $1,505.8 Which of
the following is true? Select one: a. Unrealized losses of $29.8 million on trading securities are included in annual
income. b. Waterton's year-end balance sheet includes short-term investments of $1,535.4 million. c. There are no
net unrealized gains on available-for-sale securities. d. Accumulated other comprehensive income included no
unrealized gains or losses. e. None of these are correct
The following data were taken from the statement of affairs of RCFE Corp:Bonds payable without security: P800,000Stockholders' equity: 450,000Accounts payable: 350,000Salaries: 50,000Taxes: 75,000Trustee expenses: 45,000Loss on realization: 550,000How much is the total free assets?
During Year 1, Anthony Company purchased debt securities and holds the securities as available-for-sale. Pertinent data are as
follows:
Security
A
B
C
Cost
$20,000
40,000
90,000
$150,000
O $11,000.
O $1,000.
O $3,000.
O $13,000.
Fair value
at 12/31/Y1
$17,000
30,000
92,000
$139,000
Anthony appropriately carries these securities at fair value, and the decline in value of Security B is attributed to credit loss. The
change in value of securities A and C is considered to be due to factors other than credit loss. The amount of loss on these securities
that will appear on Anthony's balance sheet as a component of "Accumulated other comprehensive income" at 12/31/Y1 should be
Chapter 16 Solutions
Intermediate Accounting
Ch. 16 - Prob. 16.1QCh. 16 - Is reporting an investment at its cost considered...Ch. 16 - Prob. 16.3QCh. 16 - Prob. 16.4QCh. 16 - Prob. 16.5QCh. 16 - Prob. 16.6QCh. 16 - What categories can managers use to classify...Ch. 16 - When is the equity method of accounting for...Ch. 16 - Prob. 16.9QCh. 16 - Can companies apply the fair value option to all...
Ch. 16 - What is the fair value hierarchy for investment...Ch. 16 - Prob. 16.12QCh. 16 - Prob. 16.13QCh. 16 - Prob. 16.14QCh. 16 - Prob. 16.15QCh. 16 - Prob. 16.16QCh. 16 - Prob. 16.17QCh. 16 - Deutsch Imports has three securities in its...Ch. 16 - Prob. 16.2MCCh. 16 - Prob. 16.3MCCh. 16 - Prob. 16.4MCCh. 16 - Prob. 16.5MCCh. 16 - Prob. 16.6MCCh. 16 - Prob. 16.7MCCh. 16 - Prob. 16.1BECh. 16 - Prob. 16.2BECh. 16 - Debt Investments, Trading. Using the information...Ch. 16 - Prob. 16.4BECh. 16 - Prob. 16.5BECh. 16 - Prob. 16.6BECh. 16 - Prob. 16.7BECh. 16 - Prob. 16.8BECh. 16 - Prob. 16.9BECh. 16 - Prob. 16.10BECh. 16 - Prob. 16.11BECh. 16 - Prob. 16.12BECh. 16 - Prob. 16.13BECh. 16 - Notes Receivable. Aaron Anatole accepted a...Ch. 16 - Prob. 16.15BECh. 16 - Prob. 16.16BECh. 16 - Prob. 16.17BECh. 16 - Debt Investments. Impairments. IFRS. For each debt...Ch. 16 - Prob. 16.19BECh. 16 - Prob. 16.1ECh. 16 - Prob. 16.2ECh. 16 - Prob. 16.3ECh. 16 - Prob. 16.4ECh. 16 - Prob. 16.5ECh. 16 - Prob. 16.6ECh. 16 - Prob. 16.7ECh. 16 - Debt and Equity Investments, Available-for-Sale...Ch. 16 - Prob. 16.9ECh. 16 - Equity Investments without a Readily Determinable...Ch. 16 - Prob. 16.11ECh. 16 - Prob. 16.12ECh. 16 - Prob. 16.13ECh. 16 - Equity-Investments, Equity Method. Book Value of...Ch. 16 - Prob. 16.15ECh. 16 - Prob. 16.16ECh. 16 - Notes Receivable. Each of the following three...Ch. 16 - Prob. 16.18ECh. 16 - Prob. 16.19ECh. 16 - Prob. 16.20ECh. 16 - Prob. 16.21ECh. 16 - Prob. 16.22ECh. 16 - Prob. 16.23ECh. 16 - Prob. 16.24ECh. 16 - Prob. 16.25ECh. 16 - Prob. 16.1PCh. 16 - Debt Investments, Trading. Freder Software Group...Ch. 16 - Prob. 16.3PCh. 16 - Equity Investments, Readily Determinable Fair...Ch. 16 - Prob. 16.5PCh. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Prob. 16.9PCh. 16 - Prob. 16.10PCh. 16 - Prob. 16.11PCh. 16 - Equity Investments, Equity Method, Fair Value...Ch. 16 - Prob. 16.13PCh. 16 - Prob. 16.14PCh. 16 - Prob. 16.15PCh. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Prob. 16.19PCh. 16 - Prob. 1JCCh. 16 - Prob. 2JCCh. 16 - Prob. 1SSCCh. 16 - Prob. 1BCCCh. 16 - Prob. 2BCC
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- Adjusting AFS Debt Securities to Fair Value A portfolio of investments of available-for-sale securities held by Dow Inc. is as follows. Dece. 31, Year 1 Cost Fair Value Eastern Corp. bonds $240,000 $256,000 Western Corp. bonds 400,000 410,000 Total $666,000 $640,000 Dece. 31, Year 2 Cost Fair Value $280,000 Eastern Corp. bonds $240,000 Western Corp. bonds 400,000 380,000 Total $640,000 $660,000 The Fair Value Adjustment account had a $0 balance on January 1 of Year 1. No sales or purchases took place in the available-for-sale investment portfolio in Year 1 and Year 2. a. Record the adjusting entry on December 31 of Year 1 to adjust the debt investments to fair value. b. Record the adjusting entry on December 31 of Year 2 to adjust the debt investments to fair value. Date a. Dec. 31, Year 1 b. Dec. 31, Year 2 Account Name To record adjusting entry. To record adjusting entry. Amount in income statement Net gain (loss) on investment $ Dr. c. Indicate how the adjustment to fair value in…arrow_forwardThe following selected information are made available by AAA company for the current year: Accounts Payable120,000 Bonds Payable 800,000 Warranty payable200,000 Total Liabilities1,300,000 Net Sales1,650,000 Total Assets2,200,000 In the common size statement of financial position, prepaid expense will have a proportional percentage of bonds payable? The total Noncurrent asset of CAM Company is P1,000,000 and the Equity is 1,200,000. The company has no liabilities during the period. If cash and cash equivalent is 500,000, what will be its proportional percentage in the common-size statement of financial position?arrow_forwardIn its year end financial statements, Big Bank Corporation reports marketable debt securities of $416,099 million. The footnotes disclose that these securities have an amortized cost of $418,961 million. Which of the following is true? Select one: a. There are net unrealized losses of $2,862 million on these securities. b. These are trading securities. c. These are available-for-sale securities. d. Both A and C e. Both B and Carrow_forward
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