Reading 21- LOS A ～ Q6－10

答案和详解如下：

6.SFAS No. 115 establishes different categories of securities with distinct ways of treating them on the financial statements of the company. Which of the following categories requires realized and unrealized gains and losses to be reported as income? Debt:

A)  and equity trading securities.

B)  and equity securities available-for-sale.

C)  securities held-to-maturity.

D)  securities held-to-call.

The correct answer was A)

The SFAS No. 115 category, debt and equity trading securities, is for securities that, when acquired, are intended to be resold within a near term time horizon. They are classified as current assets on the balance sheet, with any realized or unrealized gains and losses reported as income.

7.Trading securities are defined as:

A)  equity securities representing 20% to 50% ownership in a public firm.

B)  debt and equity securities that are very liquid and easy to sell.

C)  equity securities representing at least 20% ownership in a private firm.

D)  debt and equity securities acquired with the intent of selling them in the near future.

The correct answer was D)

Debt and equity securities acquired with the intent of selling them in the near future are likely to be considered trading securities.

8.Which of the following securities will most likely be characterized as an available-for-sale security?

A)  Debt securities that a company has a positive intent and ability to hold to maturity.

B)  Debentures carried at amortized cost.

C)  Equity securities representing 30% ownership in another firm.

D)  Debt or equity securities that are carried on the balance sheet at fair market value and may be sold for liquidity purposes.

The correct answer was D)

Debt or equity securities that are carried on the balance sheet at fair market value and may be sold for liquidity purposes are likely to be considered as available-for-sale.

9.Which of the following securities would most likely be characterized as a held-to-maturity security?

A)  Equity securities.

B)  Debt or equity securities.

C)  Debt securities.

D)  Convertible debt securities.

The correct answer was C)

Debt securities, that a company has a positive intent and ability to hold to maturity, are most likely to be characterized as a held-to-maturity security.

10.On January 9, 2006, Company X purchased $1,000,000 of government bonds and 100,000 shares of stock in Company S for $2,000,000. They are the first marketable securities purchased in the company's history. The company intends on holding the stock for the foreseeable future and holding the bonds to maturity. As of December 31, the bonds were valued at $900,000, and the stocks were valued at $2,200,000. The bonds paid $50,000 of interest and the stocks paid $20,000 of dividends. In 2006, Company S had earnings per share of $0.90.

The marketable securities balance amount shown on the balance sheet is:

A)  $3,200,000.

B)  $3,000,000.

C)  $3,100,000.

D)  $3,070,000.

The correct answer was A)

The bonds are classified as debt securities held-to-maturity and are valued at cost. The stocks are classified as debt and equity securities available for sale and are valued at market value.