Chapter 12, Problem 12.16P

a)

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Fair value through other Comprehensive income method: FVOCI is the accounting method used for accounting stock or equity investments which are held for trading.

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To Indicate: How the Company F would account its investments in the bonds of Company D and the shares of Company W.

b)

To determine

To Calculate: The effect of realized and unrealized gains and losses associated with the bonds of Company D, and the stock of Company W, on the net income, other comprehensive income, and comprehensive income of Company F for the year ended December 31, 2016.