Q1. At the beginning of the year, Alpha Corporation purchased 10,000 shares of Beta Corporation for $20 per share. During the year, Beta paid a $2,000 cash dividend to Alpha. At the end of the year, Beta’s stock was selling for $22 per share. What amount should Alpha recognize in its year-end income statement if the investment is treated as an available-for-sale security and what amount should be recognized in the income statement if the investment is treated as a trading security? Available-for-sale
Trading security
A) $2,000 $20,000 B) $0 $22,000 C) $2,000 $22,000
Q2. What amounts should Ponca report in its year-end income statement and balance sheet as a result of its investment in securities X and Y? Income Statement
Balance Sheet
A) $30,000 unrealized gain $950,000 B) $30,000 unrealized gain $980,000 C) No gain or loss $980,000
Q3. When the market value of an investment in a debt security is less than its carrying value, how should the investor report the investment on the balance sheet if the security is classified as held-to-maturity and what amount should be reported if the security is classified as available-for-sale? Held-to-maturity
Available-for-sale
A) Amortized cost Fair value B) Amortized cost Amortized cost C) Fair value Fair value
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发表于 2009-1-17 10:44
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