9th Edition

ISBN: 9781260681956

Author: SPICELAND

Publisher: MCG

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Chapter 12, Problem 12.4BE

Available -for-sale securities

• LO12-4

S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $880,000. At December 31, the bonds had a fair value of $873,000, and S&L has the intent and ability to hold the investment until fair value recovers. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment?

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Chapter 12, Problem 12.3BE

Chapter 12, Problem 12.5BE

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Chapter 12 Solutions

INTERMEDIATE ACCOUNTING, W/CONNECT

Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

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Solution Summary: The author explains that available-for-sale (AFS) securities are short-term investments in debt and equity securities with an intention of holding the investment for strategic purposes.

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