Available-for-sale investments: Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments. They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income. Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement Requirement 1 To determine: What amount of $ 18 million net realised losses will be reported on the income statement and

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Answer 1

Question

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

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KIARA LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Property, plant and equipment (cost) Accumulated depreciation Long-term investments Inventory Accounts receivable Company tax paid in advance Bank EQUITY AND LIABILITIES 2024 2023 R R 2 490 000 1 620 000 (630 000) 660 000 1 050 000 1 230 000 30 000 (480 000) 450 000 1 290 000 900 000 0 750 000 660 000 5 580 000 4 440 000 Ordinary share capital 2 700 000 2 000 000 Retained income 1 500 000 1 158 000 Long-term loan from Kip Bank (15%) 900 000 1 000 000 Accounts payable 480 000 228 000 Company tax payable 0 54 000 5 580 000 4 440 000 ADDITIONAL INFORMATION All purchases and sales are on credit. Interim dividends paid during the year amounted to R150 750. Credit terms of 3/10 net 60 days are granted by creditors.

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REQUIRED Study the information given below and answer the following questions. Where discount factors are required use only the four decimals present value tables that appear after the formula sheet or in the module guide. Ignore taxes. 5.1 Calculate the Accounting Rate of Return on average investment of the second alternative (expressed to two decimal places). 5.2 Determine which of the two investment opportunities the company should choose by calculating the Net Present Value of each alternative. Your answer must include the calculation of the present values and NPV. 5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION The management of Bentall Incorporated is considering two investment opportunities: (5 marks) (9 marks) (6 marks) The first alternative involves the purchase of a new machine for R900 000 which…

Answer 2

Question

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Answer 6

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

Answer 7

Chapter 15, Problem 17E

To determine

Concept Introduction:

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement

Requirement 1

To determine:

What amount of $ 18 million net realised losses will be reported on the income statement and

Answer 8

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Answer 9

To determine

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

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Answer 13

Ch. 15 - Prob. 1DQ Ch. 15 - Prob. 2DQ Ch. 15 - Prob. 3DQ Ch. 15 - Prob. 4DQ Ch. 15 - Prob. 5DQ Ch. 15 - Prob. 6DQ Ch. 15 - Prob. 7DQ Ch. 15 - Prob. 8DQ Ch. 15 - Prob. 9DQ Ch. 15 - Prob. 10DQ

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Requirement 2

To determine:

The statement in which the net unrealized losses will be reported

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Chapter 15 Solutions

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Requirement 2 To determine: The statement in which the net unrealized losses will be reported

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Chapter 15 Solutions

Requirement 2

To determine:

The statement in which the net unrealized losses will be reported