Investment : The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment. Available-for-sale (AFS) securities : These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk. Other Comprehensive income : OCI includes all financial items which result in changes in the stockholders’ equity , other than stock investments and dividends. To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

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Answer 1

Question

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

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Answer 2

Question

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

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Answer 4

Question

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

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Answer 5

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

Answer 6

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

Answer 7

Chapter 12, Problem 12.7BYP

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.

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.

Other Comprehensive income: OCI includes all financial items which result in changes in the stockholders’ equity, other than stock investments and dividends.

To Explain: The amount of accumulated other comprehensive income to be reported by Company M.

Answer 8

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

Answer 9

b)

To determine

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Prob. 12.1Q 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

To Explain: “Reclassification adjustment for losses (gains) included in net income” as reported by Company M.

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Chapter 12 Solutions