ZuoTi.Pro
Question

Question 26 (1 point) Which of the following is not true when the fair value option is elected for an investment that would n

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution:

The false statement when the fair value option is elected for an investment that would normally be accounted for under the equity method is "No journal entry need be made to recognize the investor's portion of dividends paid by the investee."

Hence 3rd option is corret.

0 0
Add a comment
Know the answer?
Add Answer to:
Question 26 (1 point) Which of the following is not true when the fair value option...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question #2 The following are the cost and fair value for a debt investment (Available to...

    Question #2 The following are the cost and fair value for a debt investment (Available to December 31, 2020. of investment Available for Sale) on Fair Value Debt Investment - Available for Sale Cost 10,000,000 $ $ 9,000,000 Assume the company had Net Income of $620,000 at the end of 2020 Required: 1) Calculate the Unrealized Holding Gains and Losses. 2) Does the Unrealized Holding Gains and Losses affect the Income Statement or Balance Sheet 3) Prepare the journal entry...

  • Spring 2020 - Fair Val Question 1 The following are the costs and fair values for...

    Spring 2020 - Fair Val Question 1 The following are the costs and fair values for two inve December 31, 2020. Fair Value Adjustments s for two investment in stocks (Trading Securities) on Cost Company A - Stock 1 Company A - Stock 2 S Foir Value 650,000 360,000 $ 710,000 340,000 Required: 1) Calculate the Unrealized Holding Gains and losses. 2) Does the Unrealized Holding Gains and Losses affect the inco 3) Prepare the journal entry to record any...

  • Investor company owns 35% of investee company voting stock and accounts for the investment under the...

    Investor company owns 35% of investee company voting stock and accounts for the investment under the equity method. investors share of investees current net loss exceeds the balance in the investment account. investor should in most cases A. Lower of cost or market, with unrealized gains and losses include in earnings. B. Fair value, with unrealized gains included in earnings only to the extent of previously recognized unrealized losses unless accounting alternative is elected.. C. Fair value, with unrealized gains...

  • Which of the following is not true about the fair value option?

    Which of the following is not true about the fair value option? The fair value option is irrevocable. The fair value option must be elected for all shares of an investment in a particular company. None these answer choices is true Electing the fair value option for held-to-maturity investments reclassifies those investments as trading securities.Level 1 valuation is preferred over Level 3 valuation.

  • Question 26 Martinez Corporation has elected to use the fair value option for one of its...

    Question 26 Martinez Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 10% and has a carrying value of $15,000. At year-end, Martinez’s borrowing rate (credit risk) has declined; the fair value of the note payable is now $16,300. Determine the unrealized holding gain or loss on the note. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)...

  • Assume the fair value option for financial assets and liabilities is not elected. Which of the...

    Assume the fair value option for financial assets and liabilities is not elected. Which of the following would not be an item classified separately under other comprehensive income? 1) Foreign currency items 2) Adjustments to record funded status of pension plans 3) Unrealized gains (losses) on available‐for‐sale debt securities 4) Gains (losses) on sale of treasury stock

  • Knowledge Check 01 Match each classification of debt investments with the treatment of unrealized holding gains...

    Knowledge Check 01 Match each classification of debt investments with the treatment of unrealized holding gains and losses by using the pull-down menus. 1. Available-for-sale 2. Held-to-maturity (fair value option not elected) 3. Trading Securities Not recognized Recognized in net income Recognized in other comprehensive income

  • Answers given for all. Can you explain each with formulas. 23.      On January 1, 2019,...

    Answers given for all. Can you explain each with formulas. 23.      On January 1, 2019, Windy Meadows Corp. acquired a 10% interest in Jones Enterprises for $20,000.   The stock has a readily determinable fair value, so the investor measures the Equity Investment at fair value with all unrealized gains and losses flowing through net income. On December 31, 2019 the fair value of the 10% common stock investment is $24,000. On April 1, 2020, Windy Meadows acquired an additional...

  • In its 2018 annual report to shareholders, Kirby Inc. included the following disclosure regarding its available...

    In its 2018 annual report to shareholders, Kirby Inc. included the following disclosure regarding its available for sale investments in securities: December 31 2018 2017 2016 In thousands Accumulated other comprehensive income Unrealized holding gains (losses) on securities: Balance at beginning of year — (7,543 ) (6,872 ) Unrealized holding gains (losses) for the year 1,519 (3,574 ) (681 ) Unrealized holding losses recognized in NI. — 11,117 — Balance at end of year 1,519 — (7,553 ) Required: Prepare...

  • Ewok Enterprises recently elected the fair value option to account for its investment in Yoda Inc....

    Ewok Enterprises recently elected the fair value option to account for its investment in Yoda Inc. Ewok purchased the shares for $209,000 and the shares are currently trading for $195,000 at year-end. What is the amount of gain or loss reported at year-end for this investment and where is this gain or loss reported? O A. Unrealized Gain of $14,000, reported as part of Net Income. OB. Unrealized Gain of $14,000, reported as part of Other Comprehensive Income. O C....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT