Investment in securities: An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company. Influencing investments can be classified into two major types as follows: Controlling interest : In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases. Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments. Non influencing investments can be classified into three major types as follows: Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost. Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period. Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold. The situation when equity method is used for accounting for investment in equity securities

Question

Want to see the full answer?

Answer 1

Question

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Cash Book Balance? Answer step by step

On July 1, 2012, ed wynne signed an agreement to operate as a franchise solve this question

5 Marks Question- FINANCIAL ACCOUNTING Summit Traders purchased goods listing $60,000, receiving trade discount 10% and quantity discount 5%. What is the net purchase price?

Answer 2

Question

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Answer 6

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Answer 7

Chapter 15, Problem 10DQ

To determine

Introduction:

Investment in securities:

An investment in the security of another company can and influencing investment or non influencing on the basis of type of investment made. An influencing investment in securities provides the controlling or influencing power to the investor in the company.

Influencing investments can be classified into two major types as follows:

Controlling interest: In this case the investor holds more than 50% equity of the company and it has control over the management of the company. The accounts of the company are required to be consolidated in such cases.

Significant influence: In this case the investor holds more than 20% but less than 50% equity of the company and it has significant influence over the management of the company. The investor follows the equity method to account such type of investments.

Non influencing investments can be classified into three major types as follows:

Held to maturity: Held to maturity is a type of investment that the investor intends to hold till maturity. These securities are recorded at cost.

Trading: Trading securities are purchased by the investor for the purpose to sell within a short term period to each profit. These securities are recorded at their fair value and any gain or loss in recognized in the income statement for that period.

Available for sale: All the other securities are considered as available for sale and these securities are recorded at their fair value and any gain or loss is recognized unrealized gain or loss until the securities are actually sold.

The situation when equity method is used for accounting for investment in equity securities

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 15 - Prob. 1QS Ch. 15 - Prob. 2QS Ch. 15 - Prob. 3QS Ch. 15 - Prob. 4QS Ch. 15 - QS 15-5 Reporting trading securities on financial...Ch. 15 - Prob. 6QS Ch. 15 - Prob. 7QS Ch. 15 - Prob. 8QS Ch. 15 - Prob. 9QS Ch. 15 - Prob. 10QS

Videos

Want to see the full answer?

Chapter 15 Solutions