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 fair value.
The measurement alternative cannot be elected when the fair value of the investment is readily determinable.
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Which of the following is a false statement about the measurement alternative for an investment in equity securities tha...
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...
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PM Distributors began Year 2 with Equity Investments of $8,400 (which consisted of a single investment) as well as a debit balance of $900 in the Fair Value Adjustment − Equity Investments account. PM does not have significant influence over the investee, and the investment has a readily determinable fair value. This trading security was sold for $9,300 during Year 2. How much was the gain or loss for the sale of this investments and how is it recorded? A....
An entity should report an investment in marketable equity securities that does not result in significant...
An entity should report an investment in marketable equity securities that does not result in significant influence or control over the investee at: Lower of cost or market, with holding gains and losses included in earnings. Lower of cost or market, with holding gains included in earnings only to the extent of previously recognized holding losses. Fair value, with holding gains included in earnings only to the extent of previously recognized holding losses. Fair value, with holding gains and losses...
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 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. 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...
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...
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: $324,250 cost; $352,460 fair value. Carperk intends to hold these bonds until they mature in 5 years. Investment in Baybridge common stock: 29,500 shares; $257,779 cost; $280,206 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. Investment in Duffa bonds: $132,943 cost; $143,313 fair value. This investment...
Use the following facts for Multiple Choice problems 17 and 18 (each question is independent of...
Use the following facts for Multiple Choice problems 17 and 18 (each question is independent of the other): On January 1, 2019, an investor purchases 32,000 common shares of an investee at $11 (cash) per share. The shares represent 24% ownership in the investee. The investee's common stock does not have a readily determinable fair value. On January 1, 2019, the book value of the investee's assets and liabilities equals $1,700,000 and $600,000, respectively. On that date, the appraised fair...
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...
E17.22 (LO 4) (Impairment) Elaina Company has the following investments as of December 31, 2020: Investments...
E17.22 (LO 4) (Impairment) Elaina Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,500,000 Investment in debt securities of FourSquare Company $3,300,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Elaina's stock investments does not result in significant influence on the operations of Laser Company. Elaina's debt investment is considered held-to-maturity. At December 31, 2021, the shares in...
describe them in your ouwn words. as a long parragraph Revenue Recognition Sales revenue is recognized...
describe them in your ouwn words.
as a long parragraph
Revenue Recognition Sales revenue is recognized at the time of product shipment or delivery, depending on when control passes, to unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, consumer and trade promotions, rebates and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities...
Use the following facts for Multiple Choice problems 17 and 18 (each question is independent of the other): On January 1, 2019, an investor purchases 32,000 common shares of an investee at $11 (cash) per share. The shares represent 24% ownership in the investee. The investee's common stock does not have a readily determinable fair value. On January 1, 2019, the book value of the investee's assets and liabilities equals $1,700,000 and $600,000, respectively. On that date, the appraised fair...
E17.22 (LO 4) (Impairment) Elaina Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,500,000 Investment in debt securities of FourSquare Company $3,300,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Elaina's stock investments does not result in significant influence on the operations of Laser Company. Elaina's debt investment is considered held-to-maturity. At December 31, 2021, the shares in...
describe them in your ouwn words.
as a long parragraph
Revenue Recognition Sales revenue is recognized at the time of product shipment or delivery, depending on when control passes, to unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, consumer and trade promotions, rebates and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities...
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