Which of the following statements does not reflect the provisions of ASU 2016-01 related to fair...
Which of the following statements does not reflect the provisions of ASU 2016-01 related to fair value measurement?
Multiple Choice
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It requires minority-passive equity investments (generally less than 20% ownership) to be measured at fair value with changes in fair value recognized in net income, unless there is no readily determinable fair value.
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It requires an entity applying the fair value option to its own liabilities to recognize in other comprehensive income (not net income) the change in fair value attributable to the entity’s creditworthiness.
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It simplifies the impairment assessment of equity investments that do not have readily determinable fair values.
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It requires an entity applying the fair value option to its own liabilities to recognize in net income the change in fair value attributable to the entity’s creditworthiness.
Homework Answers
The statement "It requires an entity applying the fair value option to its own liabilities to recognize in net income the change in fair value attributable to the entity’s creditworthiness." does not reflect the provisions of ASU 2016-01 related to fair value measurement.
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Which of the following statements does not
reflect the provisions of ASU 2016-01 related to fair...
Which of the following is a false statement about the measurement alternative for an investment in equity securities tha...
Which of the following is a false statement about the measurement alternative for an investment in equity securities that does not result in control or significant influence over the investee? Under the measurement alternative, an impairment loss is recognized for the excess of the carrying amount of the investment over its fair value. The investment is measured at fair value through net income. If the measurement alternative is selected, it must be applied until the investment has a readily determinable...
Under fair-value accounting for an equity investment, which of the following statements is false? a. An...
Under fair-value accounting for an equity investment, which of the following statements is false? a. An entity may choose the fair value election for an equity investment only if it is irrevocable. b. Under the fair value option, changes in fair value are recorded in earnings. c. Under the fair value option, the Investment account would be adjusted for the change in fair value. d. Under the fair value option, the entity would reduce the investment account for its share...
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...
Tasks: Prepare entry A to recognize goodwill portion of the original acquisition fair value. Prepare entry...
Tasks:
Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
Prepare entry I to eliminate intra-entity income accrual for the
current year based on the parent's usage of the partial equity
method
Prepare entry D to eliminate intra-entity dividend transfers
Prepare entry E
Prepare entry *C.
Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained earnings balance has
been adjusted for 2017 income and dividends
Prepare entry A to recognize original...
Tasks: Prepare entry A to recognize allocations determined above in connection with acquisition-date fair values. Prepare...
Tasks:
Prepare entry A to recognize allocations determined above in
connection with acquisition-date fair values.
Prepare entry I to eliminate intra-entity dividend declarations
recorded by parent as income.
Prepare entry E to recognize 2017 amortization expense.
Prepare entry *C to convert parent company figures to equity
method by recognizing subsidiary's increase in book value for prior
year [$104,500 net income less $13,000 dividend declaration] and
excess amortizations for that period [$11,800].
Prepare entry A to recognize allocations relating to
investment—balances...
please answer all Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in...
please answer all
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $405,000 in cash. The subsidiarys stockholders' equity accounts totaled $389,000 and the noncontrolling interest had a fair value of $45,000 on that day. However a building (with a nine-year remaining life) in Brey's accounting records was undervalued by $27,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four year remaining life) Brey reported net...
Forecast the Statement of Cash Flows Following are the income statements and balance sheets of Best...
Forecast the Statement of Cash Flows Following are the income statements and balance sheets of Best Buy Co., Inc. Income Statement, Fiscal Years Ended ($ millions) 2012 Estimated Feb. 26, 2011 Revenue $53,037 $50,272 Cost of goods sold 39,672 37,611 Restructuring charges - cost of goods sold -- 24 Gross profit 13,365 12,637 Selling, general and administrative expenses 10,873 10,325 Restructuring charges -- 198 Goodwill and tradename impairment -- -- Operating income 2,492 2,114 Other income (expenses) Investment income and...
Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and...
Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and balance sheets of General Mills, Inc. Income Statement, Fiscal Years Ended ($ millions) May 29, 2011 May 30, 2010 Net Sales $ 14,880.2 $ 14,635.6 Cost of sales 8,926.7 8,835,4 Selling general and administrative expenses 3.192.0 3,162.7 Divestitures (gain), net (17.4) Restructuring, impairment, and other exit costs 4.4 31.4 Operating income 2.606.1 Interest, net 401.6 Earnings before income tax expense and equity in income...
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $396,000...
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $396,000 in cash. The subsidiary's stockholders' equity accounts totaled $380,000 and the noncontrolling interest had a fair value of $44,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $25,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). Brey reported net income from its own...
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $423,000...
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $423,000 in cash. The subsidiary's stockholders' equity accounts totaled $407,000 and the noncontrolling interest had a fair value of $47,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $31,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life). Brey reported net income from its own...
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...
Tasks:
Prepare entry A to recognize goodwill portion of the original
acquisition fair value.
Prepare entry I to eliminate intra-entity income accrual for the
current year based on the parent's usage of the partial equity
method
Prepare entry D to eliminate intra-entity dividend transfers
Prepare entry E
Prepare entry *C.
Prepare entry S to eliminate beginning of year stockholders'
equity accounts of subsidiary—the retained earnings balance has
been adjusted for 2017 income and dividends
Prepare entry A to recognize original...
Tasks:
Prepare entry A to recognize allocations determined above in
connection with acquisition-date fair values.
Prepare entry I to eliminate intra-entity dividend declarations
recorded by parent as income.
Prepare entry E to recognize 2017 amortization expense.
Prepare entry *C to convert parent company figures to equity
method by recognizing subsidiary's increase in book value for prior
year [$104,500 net income less $13,000 dividend declaration] and
excess amortizations for that period [$11,800].
Prepare entry A to recognize allocations relating to
investment—balances...
please answer all
Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2016, in exchange for $405,000 in cash. The subsidiarys stockholders' equity accounts totaled $389,000 and the noncontrolling interest had a fair value of $45,000 on that day. However a building (with a nine-year remaining life) in Brey's accounting records was undervalued by $27,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four year remaining life) Brey reported net...
Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and balance sheets of General Mills, Inc. Income Statement, Fiscal Years Ended ($ millions) May 29, 2011 May 30, 2010 Net Sales $ 14,880.2 $ 14,635.6 Cost of sales 8,926.7 8,835,4 Selling general and administrative expenses 3.192.0 3,162.7 Divestitures (gain), net (17.4) Restructuring, impairment, and other exit costs 4.4 31.4 Operating income 2.606.1 Interest, net 401.6 Earnings before income tax expense and equity in income...
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