ACCOUNTING,CHAP.1-13
26th Edition
ISBN: 9781305088412
Author: WARREN
Publisher: CENGAGE L
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Question
Chapter 15, Problem 5DQ
To determine
Equity investment: Equity investments are stock instruments which claim ownership in the investee company and pay a dividend revenue to the investor company.
To describe: The accounting treatment of equity investment, if the investor invests more than 50% in outstanding company
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Students have asked these similar questions
If an investor sells an ordinary share at a price above that which he or she originally paid, the investor is said to have earnedSelect one:
a.a capital expenditure.
b.a capital gain.
c.an originating point.
d.a dividend.
explain well all point of question.
For the purposes of equity accounting, it is presumed that tne investor has significant influence over the other
entity where the investor holds:
Select one:
0. 75% or more of the voting power of the investee.
b. 205 or more of the voting power of the investee.
C. between 5% and 105 of the voting power of the investee.
d. 1005 of the voting power of tne investee.
Question:
Match the key term to the scenario.
Terms:
1. Available-for-Sale Investments
2. Controlling Interest Investment
3. Trading Investments
4. Held-to-maturity Investments
5. Significant Interest Investment
Scenarios:
a. Jane owns 53% of Richard's Roses voting stock.
b. Joe owns a debt security in Bones, Inc. and intends
to hold it until maturity.
c. Jeannie owns 18% of Cricket, Inc. voting stock and
plans on selling the stock after one year.
d. Jacob owns 24% of Pay, Inc. voting stock.
e. Jim owns 10% of Tag, Inc. voting stock and plans
on selling the stock next week.
Chapter 15 Solutions
ACCOUNTING,CHAP.1-13
Ch. 15 - Why might a business invest cash in temporary...Ch. 15 - What causes a gain or loss on the sale of a bond...Ch. 15 - When is the equity method the appropriate...Ch. 15 - How does the accounting for a dividend received...Ch. 15 - Prob. 5DQCh. 15 - What is the major difference in the accounting for...Ch. 15 - Prob. 7DQCh. 15 - How would a debit balance in Unrealized Gain...Ch. 15 - What are the factors contributing to the trend...Ch. 15 - Prob. 10DQ
Ch. 15 - Prob. 15.1APECh. 15 - Bond investment transactions Journalize the...Ch. 15 - Prob. 15.2APECh. 15 - Stock investment transactions On September 12,...Ch. 15 - Prob. 15.3APECh. 15 - Prob. 15.3BPECh. 15 - Prob. 15.4APECh. 15 - Prob. 15.4BPECh. 15 - Prob. 15.5APECh. 15 - Prob. 15.5BPECh. 15 - Prob. 15.6APECh. 15 - Prob. 15.6BPECh. 15 - Prob. 15.1EXCh. 15 - Prob. 15.2EXCh. 15 - Prob. 15.3EXCh. 15 - Prob. 15.4EXCh. 15 - Prob. 15.5EXCh. 15 - Entries for investment in stock, receipt of...Ch. 15 - Prob. 15.7EXCh. 15 - Prob. 15.8EXCh. 15 - Entries for stock investments, dividends, and sale...Ch. 15 - Prob. 15.10EXCh. 15 - Prob. 15.11EXCh. 15 - Prob. 15.12EXCh. 15 - Prob. 15.13EXCh. 15 - Prob. 15.14EXCh. 15 - Prob. 15.15EXCh. 15 - Prob. 15.16EXCh. 15 - Fair value journal entries, trading investments...Ch. 15 - Prob. 15.18EXCh. 15 - Prob. 15.19EXCh. 15 - Prob. 15.20EXCh. 15 - Prob. 15.21EXCh. 15 - Prob. 15.22EXCh. 15 - Prob. 15.23EXCh. 15 - Prob. 15.24EXCh. 15 - Prob. 15.25EXCh. 15 - Prob. 15.26EXCh. 15 - Prob. 15.27EXCh. 15 - Prob. 15.28EXCh. 15 - Prob. 15.29EXCh. 15 - Prob. 15.1APRCh. 15 - Prob. 15.2APRCh. 15 - Stock Investment transaction, equity method and...Ch. 15 - Prob. 15.4APRCh. 15 - Prob. 15.1BPRCh. 15 - Prob. 15.2BPRCh. 15 - Stock investment transactions, equity method and...Ch. 15 - Prob. 15.4BPRCh. 15 - Selected transactions completed by Equinox...Ch. 15 - Benefits of fair value On July 16, 1998, Wyatt...Ch. 15 - International fair value accounting International...Ch. 15 - Prob. 15.3CPCh. 15 - Warren Buffett and "look-through" earnings...Ch. 15 - Prob. 15.5CP
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- When an individual owns directly stocks of the company, he has: Group of answer choices a. Direct Financial Interest b. Indirect Financial Interest c. Both Direct and Indirect d. Neither Direct nor Indirectarrow_forwardWhich of the following methods of valuing shares will be most appropriate for a prospective investor who intends acquiring controlling interest in a target company?A Earnings YieldB Dividend YieldC Net assetsD Accounting Rate of Returnarrow_forwardThe cost of dividend payable on redeemable preference shares should be included in______. Select one: a. in the statement of income after identifying profit after tax b. in the statement of income before identifying the profit before tax c. as a deduction in the statement of changes in equity d. in the statement of income as a deduction prior to identifying profit from operationsarrow_forward
- What investment is eligible to be held within a RRIF? • a) shares of a privately owned corporation O b) gold bars • c) commodity futures contracts O d) real estatearrow_forwardquestion 9 choose the correct answer from the choicesarrow_forwardIf the employee has the choice as to whether the settlement is in cash or by issuance of equity securities, the share-based payment is accounted as A. A financial liability B. Compound financial instrument C. An equity instrument D. Either equity or financial liability but not botharrow_forward
- For accounting purposes, the method used to account for investments in common stock is determined by: a. the amount paid for the stock by the investor b. whether the acquisition of the stock by the investor was "friendly" or "hostile" c. the extent of an investor's influence over the operating and financial affairs of the investee d. whether the stock has paid dividends in past yearsarrow_forwardHow are held-to-maturity investments reported on the financial statements?arrow_forwardFor investments in equity securities, which will result in recording income based on the income of the investee? Select one: a. Held-to-maturity classification b. Trading classification O C. Available-for-sale classification O d. Equity method of accountingarrow_forward
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