Carrying value of Clay Company’s marketable securities Clay Company owns the following marketable securities, all of which were purchased at the beginning of 2021: Firm # Shares Owned by Clay Ownership Held by Clay Clay’s Cost Market Value (12/31/21) Annual Dividend Total 2021 Earnings A 50,000 15% €40.00 €46.00 €0.75 €50,000 B 100,000 25% €10.00 […]
Marketable Securities’ Total Contribution to Pretax Income Clay Company owns the following marketable securities, all of which were purchased at the beginning of 2021: Firm # Shares Owned by Clay Ownership Held by Clay Clay’s Cost Market Value (12/31/21) Annual Dividend Total 2021 Earnings A 50,000 15% €40.00 €46.00 €0.75 €50,000 B 100,000 25% €10.00 […]
Miller Corp’s marketable equity securities portfolio acquired earlier this year is reported as follows: Category Fair Value through Profit or Loss Fair Value through Other Comprehensive Income Cost €64,000 €75,000 Fair Value €48,000 €62,000 According to IFRS, Miller should report an unrealized holding loss in its current year income statement of: a. €13,000 b. €16,000 […]
Kensington plc, a hypothetical company based in the United Kingdom The following information relates to Questions 1–7 Kensington plc, a hypothetical company based in the United Kingdom, offers its employees a defined benefit pension plan. Kensington complies with IFRS. The assumed discount rate that the company used in estimating the present value of its pension […]
Investment adjustment required under IFRS Munich Corporation owns a 30% equity interest in Cologne Inc. The carrying value of the investment at year end was €75 million and the fair value, less selling costs, was €62 million. The present value of the future expected cash flows is €65 million. What adjustment, if any, is required […]
What amount of goodwill is created on acquisition This year, Fat purchased a 40% interest in Thin for $275,000. On the acquisition date, Thin’s shareholders’ equity was $450,000. The carrying amounts of Thin’s identifiable net assets approximated their fair values except for land, whose fair value exceeded its carrying value by $75,000. What amount of […]
How Bond Discount is Amortized GBS Corporation recently purchased a coupon bond at a discount. GBS must amortize the bond discount in its income statement if the bond is reported on the balance sheet at: a. amortized cost, and fair value through other comprehensive income. b. amortized cost, but not fair value through other comprehensive […]
Passive Cash Dividend Received Pine Company received a cash dividend from Wood Corporation. What is the impact on the balance sheet investment account of Pine if the investment is considered passive? a. No effect. b. Increase. c. Decrease. Related: Marketable investments reported on the balance sheet at fair value Solution The impact on the balance sheet […]
Marketable investments reported on the balance sheet at fair value Which of the following marketable investments are reported on the balance sheet at fair value? a. Passive debt securities and controlling securities. b. Influential securities and controlling securities. c. Passive equity securities. Related questions; (Solved) Impact of Passive Cash Dividend Received Solution Debt instruments […]
