Classifying Investments in Securities Match each security listed below with its usual classification: (1) trading securities, (2) available-for-sale securities, (3) equity method securities, (4) held-to-maturity securities, or (5) equity securities measured at FV-NI.
Classifying Investments in Securities Match each security listed below with its usual classification: (1) trading securities, (2) available-for-sale securities, (3) equity method securities, (4) held-to-maturity securities, or (5) equity securities measured at FV-NI.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Classifying Investments in Securities
Match each security listed below with its usual classification: (1) trading securities, (2) available-for-sale securities, (3) equity method securities, (4) held-to-maturity securities, or (5) equity securities measured at FV-NI.
a. Abbot common stock, no-par; acquired to use temporarily idle cash with intent to sell next month. | |
b. 30% interest in Packaging Inc.; acquired to drive costs down through vertical integration. | |
c. Mack stock held in trading account. | |
d. Hasten Inc.'s 10-year bonds acquired. Hasten intends to hold to maturity, but may need to sell the bonds earlier for cash. | |
e. Staufer common stock, par $5; acquired to gain a significant influence, but not control. | |
f. Frazer bonds, 9% mature at the end of 10 years; acquired with the intent and ability to hold for 10 years. | |
g. Foreign Corp. common stock; a 30% interest acquired, but difficulties encountered in an attempt to obtain representation on the Foreign Corporation's board of directors. Intent is to hold stock indefinitely. | |
h. Astroid common stock, par $1; acquired as an investment (with insignificant influence) that management plans to hold indefinitely. |
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