Homework Answers
Answer - The Correct answer is B) No Significant Influence Equity.
Under No Significant Influence Equity Investor Lacks tha ability to participate in decision of Investee company.
Controlling Interest Equity
These are Securities in which the Investors Owns More than 50% of Investee Voting Stock.
Significant Influence Equity
These are the Securities in which Investor Owns 20% or more but less than 50% of the Investee's Voting Stock.
Available for Sale Equity
These are securities that Investor does not plan to Hold Until They Mature.
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2.
Equity securities in which the investor...
2. Equity securities in which the investor lacks the...
Equity securities in which the investor owns less than 20% ownership in the voting stock of...
Equity securities in which the investor owns less than 20% ownership in the voting stock of the investee generally can be classified as equity investments. A. held-to-maturity B. no significant influence C. controlling interest D. significant influence
________ are equity securities in which the investor owns 20% or more, but less than 50%,...
________ are equity securities in which the investor owns 20% or more, but less than 50%, of the investee's voting stock. Held-to-maturity investments Significant interest investments Available-for-sale investments Controlling interest investments
Long-term investments cannot include: Multiple Choice Held-to-maturity debt securities. Securities with maturity dates within three months....
Long-term investments cannot include: Multiple Choice Held-to-maturity debt securities. Securities with maturity dates within three months. Equity securities giving an investor insignificant influence over an investee. Equity securities giving an investor significant influence over an investee. Available-for-sale debt securities.
Which of the following observations is NOT consistent with the accounting for investments in equity securities...
Which of the following observations is NOT consistent with the accounting for investments in equity securities where there is no significant influence? a) When the securities are remeasured to fair value as of the end of each period, any resulting difference is an unrealized gain or loss to be recognized in income b) Changes in the number of investment shares resulting from stock dividends, stock splits, or reverse splits must be formally recorded by the investor c) The investor recognizes...
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...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
What is the method of accounting for investments in equity securities in which the investor records...
What is the method of accounting for investments in equity securities in which the investor records its share of periodic net income of the company that they have invested in? O market method O income method O cost method O equity method Land costing $71,000 was sold for $50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from...
Equity method mechanics with other comprehensive income An investor company owns 40% of the outstanding common...
Equity method mechanics with other comprehensive income An investor company owns 40% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $650,000 as of the end of the previous year. During the year, the investor received dividends of $70,000 from the investee. The investee reports the following income statement for the year: Revenues $2,300,000 Expenses 1,800,000 Net income 500,000 Other comprehensive income 100,000...
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 a. Investment in Brava Company bonds: $420,500 cost: $457000 fair value Carperk intends to hold these bonds until they mature in 5 years. b. Investment in Baybridge common stock: 29,500 shares; $362,450 cost: $391,375 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. C. Investment in Duffa bonds: $165,500 cost; $178,000 fair...
In a continuation of their efforts to explore the financial condition of ABC Company, the Board...
In a continuation of their efforts to explore the financial
condition of ABC Company, the Board of Directors has now started to
explore the various investment strategies of the company. They
would like to understand more about the differences between debt
versus equity investments. They also wish to learn more about the
various types of investments reported on the Balance Sheet. Using
your text and outside sources, explain the following:
(1) debt versus equity securities;
(2) various types of investments...
Equity securities in which the investor owns less than 20% ownership in the voting stock of the investee generally can be classified as equity investments. A. held-to-maturity B. no significant influence C. controlling interest D. significant influence
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...
Equity method journal entries (price greater than book value) An investor purchases a 30% interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee's Stockholders' Equity on the acquisition date is $500,000, and the investor purchases its 30% interest for $195,000. The investor is willing to pay the purchase price because the investee owns an unrecorded (internally developed) patent that the investor estimates is worth $150,000....
What is the method of accounting for investments in equity securities in which the investor records its share of periodic net income of the company that they have invested in? O market method O income method O cost method O equity method Land costing $71,000 was sold for $50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from...
The following information shows Carperk Company's individual Investments in securities during its current year, along with the December 31 fair values a. Investment in Brava Company bonds: $420,500 cost: $457000 fair value Carperk intends to hold these bonds until they mature in 5 years. b. Investment in Baybridge common stock: 29,500 shares; $362,450 cost: $391,375 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. C. Investment in Duffa bonds: $165,500 cost; $178,000 fair...
In a continuation of their efforts to explore the financial
condition of ABC Company, the Board of Directors has now started to
explore the various investment strategies of the company. They
would like to understand more about the differences between debt
versus equity investments. They also wish to learn more about the
various types of investments reported on the Balance Sheet. Using
your text and outside sources, explain the following:
(1) debt versus equity securities;
(2) various types of investments...
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