Short Term Investment Paper 1

1

Investments classified as held-to-maturity are measured at






2

Which one of the following statements with regard to marketable securities is incorrect?






3

Securities held primarily for sale in the near term to generate income on short-term price differences are known as






4

Kale Co. purchased bonds at a discount on the open market as an investment and has the intent and ability to hold these bonds to maturity. Absent an election of the fair value option, Kale should account for these bonds at






5

At year end, Rim Co. held several investments with the intent of selling them in the near term. The investments consisted of $100,000, 8%, 5-year bonds, purchased for $92,000, and equity securities purchased for $35,000. At year end, the bonds were selling on the open market for $105,000, and the equity securities had a market value of $50,000. What amount should Rim report as trading securities in its year-end balance sheet?






6

An entity should report the marketable equity securities that it has classified as trading at






7

On December 31, Ott Co. had investments in trading securities as follows:
............................Cost ........Fair Value
Man Co. ...............$10,000..... $8,000
Kemo, Inc.............. 9,000........ 11,000
Fenn Corp.............. 11,000 .......9,000
. .........................$30,000...... $28,000
Ott’s December 31 balance sheet should report the trading securities as






8

Nola Co. has a portfolio of marketable equity securities that it does not intend to sell in the near term. How should Nola classify these securities, and how should it report unrealized gains and losses from these securities?
Classify as......Report in






9

The following information pertains to Lark Corp.’s available-for-sale securities: December 31
..................Year 2.........Year 3
Cost .........$100,000.... $100,000
Fair value ....90,000 .......120,000
Differences between cost and fair values are considered to be temporary. The decline in fair value was properly accounted for at December 31, Year 2. Ignoring tax effects, by what amount should other comprehensive income (OCI) be credited at December 31, Year 3?






10

When the fair value of an investment in debt securities exceeds its amortized cost, how should each of the following debt securities be reported at the end of the year, given no election of the fair value option?
Debt Securities Classified As
Held-to-Maturity .....Available-for-Sale






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