Zebra Corporation is a publicly traded company. Which method will Zebra use toaccount for compound instruments?OA) Incremental method.B) Fair value method.OC) Proportional method.O D) Zero common equity method.

A compound instrument is an instrument or bond which contains the option of converting the same into…

Answered: Zebra Corporation is a publicly traded…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 12MCQ: When the market value of a companys available-for-sale securities is lower than its cost, the...

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The equity component of a compound financial instrument is determined O A. by allocating the issue price to the liability and equity components based on their relative fair values. B. by allocating the equity component its fair value, O c. by deducting the fair value of the liability component without the equity feature from the net proceeds from the issuance of the compound instrument D. by multiplying the no. of shares at its FMV O E. By multiplying the no. of shares at its par value
4. Boss Co. purchased bonds at a discount in the open market as an investment. The bonds will be held in order to collect their contractual cash flows. Boss should account for these bonds at a. Cost. c. Fair value through OCI. d. Lower of cost or market. b. Amortized cost. 5. According to PFRS 9, on initial recognition, the entity has the option of designating financial assets to be measured at FVPL
Which of the following is false? A. Under PFRS 9, the basis of carrying investments in debt securities as FVPL, FVOCI, or at amortized cost, is the entity’s business model. B. Under PFRS 9, an investment in equity securities not held for trading is automatically accounted for as FVOCI. C. Reclassification of investment in equity securities under PFRS 9 is not allowed. D. Under PFRS 9, reclassification of investment in debt securities is allowed. Or none of the choices?
IFRS requires companies to measure their financial assets at fair value except when based on:(a) whether the equity method of accounting is used.(b) whether the fi nancial asset is a debt investment.(c) whether the fi nancial asset is an equity investment.(d) whether an investment is classifi ed as trading.
The following is a footnote disclosure from a publicly traded company: "These valuations require significant judgment" What level in the fair value heirarchy is appropriate for this disclosure? Question 12 options: a) Level 1 b) Level 2 c) Level 3
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Which of the following is NOT included in the cost of an acquired company? (applying section 19 of IFRS for SMEs) a. Contingent consideration determinable at the consummation date of the combination b. Finder’s fee for arranging the combination c. Cost of registering and issuing equity securities d. None of the above
37. When an entity reduces its interest in an investment in equity securities accounted for by the equity method and changes in to the fair value method. What is the initial measurement of the investment for purposes of subsequent changes in market value? a. Carrying amount at the date of changea. Original costb. Market value at the date of changec. Market value at the date of acquisition
Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.
rice be *. An entity reclassifies debt securities from FVOCI to Amortized cost. On reclassification date, the amount debited to the asset's new classification is equal to the asset's a. original acquisition cost. D. fair value on reclassification date. C. amortized cost as at the reclassification date. d. fair value on acquisition date.
Which of the following statements is incorrect? a. The PAS 32 definition of "equity" reflects the basic accounting equation of "Assets - Liabilities = Equity." b. According to PAS 32, a contract is an equity instrument if it may result in the receipt or delivery of the entity's own equity instruments. C. Entity A issues a compound financial instrument for P1M. If the fair value of the liability component without the equity feature is P.8M, the value to be assigned to the equity component is P.2M. d. An intention to settle a financial asset and a financial liability on a net basis without the legal right to do so is not sufficient to justify offsetting because the rights and obligations associated with the individual financial asset and financial liability remain unaltered. %3D
5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and equity components of a compound financial instrument. b. The purchase, sale, issue or cancellation of the entity's own equity instruments. c. The conversion of bonds into the entity's own equity instrument. d. The settlement of a liability at an amount below or above its carrying amount. NOT FOR SALE! StuDOcucom respective authors.

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Zebra Corporation is a publicly traded company. Which method will Zebra use to account for compound instruments? OA) Incremental method. B) Fair value method. OC) Proportional method. O D) Zero common equity method.