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.
Homework Answers
Your required answer is option B i.e. The fair value option must be elected for all shares of an investment in a particular company.
Explanation:
Fair value option is an alternative that a company has available to record their financial insturment at fair value. And fair value option can be applied by the company's on certain items and can exclude the other items within same category.
I hope this clear your doubt.
Feel free to comment if you still have any query or need something else. I'll help asap.
Do give a thumbs up if you find this helpful.
Chapter HW on Investment in equity securities (Trading securities) The information below relates to Wynn Corporation’s...
Chapter HW on Investment in equity securities (Trading securities) The information below relates to Wynn Corporation’s investments classified as trading securities in 2017 and: 1/1/17 Purchased $100,000 par value of Barr Company bonds at 97 with an annual yield of 10%. The bonds pay interest annually on 12/31. The annual interest rate is 9%. 9/5/17 Purchased 3,200 shares of Pine, Inc. common stock for $25 per share. 12/31/17 Received $9,000 interest for investment in Barr Company bonds for 2017 (note:...
Question 26 (1 point) Which of the following is not true when the fair value option...
Question 26 (1 point) Which of the following is not true when the fair value option is elected for an investment that would normally be accounted for under the equity method? No journal entry need be made to recognize the investor's portion of the investee's net income. Unrealized holding gains and losses on that investment are recognized in net income. No journal entry need be made to recognize the investor's portion of dividends paid by the investee. All of these...
Generally accepted accounting principles require the use of fair value for all of the following except...
Generally accepted accounting principles require the use of fair value for all of the following except a. available-for-sale securities, b. held-to-maturity securities. c. trading securities. d. None of these choices are correct.
E 12-18 Fair value option; held-to-maturity investments • LO1 LO2 LO7 This is a variation of...
E 12-18 Fair value option; held-to-maturity investments • LO1 LO2 LO7 This is a variation of Exercise 12-1 focusing on the fair value option.) Tanner-UNF Company acquired as a long-term investment $240 million of 6% bonds, dated July 1. on July 1, 2012. Company management has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting for its investment. The market interest rate...
Homework problem- Investment The information below relates to Wynn Corporation's investments classified as available-for-sale securities in...
Homework problem- Investment The information below relates to Wynn Corporation's investments classified as available-for-sale securities in 2017 and: 1/1/17 Purchased $100,000 par value of Barr Company bonds at 97 with an annual yield of 10%. The bonds pay interest annually on 12/31. The annual interest rate is 9%. 9/5/17 Purchased 3,200 shares of Pine, Inc. common stock for $25 per share. 12/31/17 Received $9,000 interest for investment in Barr Company bonds for 2017 (note: the discount should be amortized using the effective...
Which of the following statement(s) is (are) true about reporting held to maturity securities? I. Investments...
Which of the following statement(s) is (are) true about reporting held to maturity securities? I. Investments in debt securities that are classified as held to maturity are reported at amortized cost. II. Interest revenue on debt securities that are classified as held to maturity are recognized as other comprehensive income. III. The market value of investments in debt securities that are classified as held to maturity must be disclosed. a. I and II b. I and III c. I, II,...
Fair Value Journal Entries, Trading Investments The investments of Charger Inc. include a single investment: 18,500...
Fair Value Journal Entries, Trading Investments The investments of Charger Inc. include a single investment: 18,500 shares of Raiders Inc. common stock purchased on February 24, 20Y1, for $46 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, 20Y1, balance sheet date, the share price had increased to $52 per share. a. Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31,...
The income statement reports changes in fair value for which type of investment securities? Multiple Choice...
The income statement reports changes in fair value for which type of investment securities? Multiple Choice Trading securities. Securities reported under the equity method. Held-to-maturity securities. Available-for-sale securities.
1-If the Fair Value Adjustment minus Trading account for trading debt investments has a debit balance,...
1-If the Fair Value Adjustment minus Trading account for trading debt investments has a debit balance, it is 2-A preferred stock is an example of a debt security. • True False 3-Equity securities, in which the investor lacks the ability to participate in the decisions of the investee company, are initially accounted for at the lower-of-cost-or-market value. True . False 4- are equity securities in which the investor owns between 20% and 50% of the investee's voting stock. 5-Securities are...
The following information shows Carperk Company's individual investments in securities during its current year, along with...
The following information shows Carperk Company's individual investments in securities during its current year, along with the December 31 fair values. Investment in Brava Company bonds: $391,050 cost; $425,071 fair value. Carperk intends to hold these bonds until they mature in 5 years. Investment in Baybridge common stock: 29,500 shares; $310,885 cost; $337,932 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. Investment in Duffa bonds: $160,331 cost; $172,837 fair value. This investment...
Question 26 (1 point) Which of the following is not true when the fair value option is elected for an investment that would normally be accounted for under the equity method? No journal entry need be made to recognize the investor's portion of the investee's net income. Unrealized holding gains and losses on that investment are recognized in net income. No journal entry need be made to recognize the investor's portion of dividends paid by the investee. All of these...
Generally accepted accounting principles require the use of fair value for all of the following except a. available-for-sale securities, b. held-to-maturity securities. c. trading securities. d. None of these choices are correct.
E 12-18 Fair value option; held-to-maturity investments • LO1 LO2 LO7 This is a variation of Exercise 12-1 focusing on the fair value option.) Tanner-UNF Company acquired as a long-term investment $240 million of 6% bonds, dated July 1. on July 1, 2012. Company management has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting for its investment. The market interest rate...
Fair Value Journal Entries, Trading Investments The investments of Charger Inc. include a single investment: 18,500 shares of Raiders Inc. common stock purchased on February 24, 20Y1, for $46 per share including brokerage commission. These shares were classified as trading securities. As of the December 31, 20Y1, balance sheet date, the share price had increased to $52 per share. a. Journalize the entries to acquire the investment on February 24, and record the adjustment to fair value on December 31,...
The income statement reports changes in fair value for which type of investment securities? Multiple Choice Trading securities. Securities reported under the equity method. Held-to-maturity securities. Available-for-sale securities.
1-If the Fair Value Adjustment minus Trading account for trading debt investments has a debit balance, it is 2-A preferred stock is an example of a debt security. • True False 3-Equity securities, in which the investor lacks the ability to participate in the decisions of the investee company, are initially accounted for at the lower-of-cost-or-market value. True . False 4- are equity securities in which the investor owns between 20% and 50% of the investee's voting stock. 5-Securities are...
Most questions answered within 3 hours.
-
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 23 minutes ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 1 hour ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 1 hour ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 3 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 4 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 4 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 4 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 4 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 4 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 5 hours ago -
Given the information in the table, which of the following
statements is CORRECT?
Stock A
Stock...
asked 4 hours ago -
Write MARIE assembly language programs that do the following:
Write a program that inputs an integer...
asked 5 hours ago