Question 1

Fish Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.What is the premium or discount (rounded)?

Accepted Answer

A) $0 
B) $1,808 
C) $98,192 
D) $100,000 
A) $0 
B) $1,808 
C) $98,192 
D) $100,000

Question 2

Which investment could be classified at amortized cost?

Accepted Answer

A) Equity instrument. 
B) Debt instrument. 
C) Derivative. 
D) Associate. 
A) Equity instrument. 
B) Debt instrument. 
C) Derivative. 
D) Associate.

Question 3

Starts has a 60% joint operation interest in Fish.Based on the following information,what amount will be presented for current liabilities on Starts' proportionately consolidated balance sheet?

Accepted Answer

A) $550 
B) $470 
C) $350 
D) $200 
A) $550 
B) $470 
C) $350 
D) $200

Question 4

Super Control Group has the following investments:
   
a)Explain how these investments will be classified and accounted for.
b)How much income will be recorded in 2016 by Super Group for its investment in VWX?
c)How much income will be recorded in 2016 by Super Group for its investment in ABC?

Accepted Answer

a)
 @#IMG-DLM& 
b)Super will record 80% of the inv

Question 5

Which statement is not correct about non-strategic investments?

Accepted Answer

A) IFRS carries FVOCI investments at fair value. 
B) IFRS records unrealized gains and losses on FVOCI investments to OCI. 
C) ASPE records unrealized gains and losses on FVPL investments to OCI. 
D) ASPE does not have an accounting treatment for FVOCI investments. 
A) IFRS carries FVOCI investments at fair value. 
B) IFRS records unrealized gains and losses on FVOCI investments to OCI. 
C) ASPE records unrealized gains and losses on FVPL investments to OCI. 
D) ASPE does not have an accounting treatment for FVOCI investments.

Question 6

Classify each of the following items into one of the seven categories of financial assets relevant for financial reporting purposes.Select the category that best suits the situation given.

Accepted Answer

The answer of Classify each of the following items into...

Question 7

Fiesta Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

Accepted Answer

A) $873.44 
B) $1,808.00 
C) $6,000.00 
D) $6,873.44 
A) $873.44 
B) $1,808.00 
C) $6,000.00 
D) $6,873.44

Question 8

Which item is an example of a financial asset?

Accepted Answer

A) Share certificate of a public company. 
B) Land. 
C) Inventory. 
D) Equipment. 
A) Share certificate of a public company. 
B) Land. 
C) Inventory. 
D) Equipment.

Question 9

What is a financial asset?

Accepted Answer

A) An asset that has a fixed or determinable cash flow. 
B) Assets such as land and buildings that generate future cash flows. 
C) An asset arising from contractual agreements on future cash flows. 
D) An asset that does not generate future cash flows. 
A) An asset that has a fixed or determinable cash flow. 
B) Assets such as land and buildings that generate future cash flows. 
C) An asset arising from contractual agreements on future cash flows. 
D) An asset that does not generate future cash flows.

Question 10

Which statement is correct about non-strategic investments?

Accepted Answer

A) IFRS carries FVOCI investments at fair value with only unrealized gains going to OCI. 
B) ASPE carries FVOCI investments at fair value with only unrealized gains going to OCI. 
C) ASPE carries FVOCI investments at fair value with unrealized gains and losses going to OCI. 
D) IFRS carries FVOCI investments at fair value with unrealized gains and losses going to OCI. 
A) IFRS carries FVOCI investments at fair value with only unrealized gains going to OCI. 
B) ASPE carries FVOCI investments at fair value with only unrealized gains going to OCI. 
C) ASPE carries FVOCI investments at fair value with unrealized gains and losses going to OCI. 
D) IFRS carries FVOCI investments at fair value with unrealized gains and losses going to OCI.

Question 11

During 2015,Farrah Ltd.purchased 4,000 shares of Rose of Sharon Corp.for $41 per share ($164,000 total).The company designated half of the shares at fair value through profit or loss and irrevocably elected to classify the remaining half of its investment at fair value through OCI.Farrah held these shares until September 2017,when it sold them for $52 per share.During these three years,Rose of Sharon paid dividends of $1 per share on July 31 each year.On Farrah's fiscal year-end (December 31),shares of Rose of Sharon closed at $51,$36,and $56 in 2015,2016,and 2017,respectively.
Required:
Determine the amounts to be reported on Farrah's balance sheet and statement of comprehensive income with respect to the company's investment in Rose of Sharon Corp for 2015,2016 and 2017.

Accepted Answer

The answer of During 2015,Farrah Ltd.purchased 4,000 shares of Rose...

Question 12

Koala had the following transactions relating to its investments during 2017.Koala uses the effective interest method of amortization of premiums or discounts when applicable.
a.On July 1,2017,Koala acquired a $400,000,16%,8-year government bond with interest paid semi-annually on January 1 and July 1.Because the market rate of interest was 12% on that date,Koala paid $480,847 for the bond.The bonds were classified as at amortized cost by Koala and had a fair value of $440,000 plus accrued interest on December 31,2017.
b.On July 1,2017,Koala acquired 10,000 shares of Gorilla at a price of $41 per share.On December 31,2017,the ex-dividend date,dividends of $2.00 per share were declared with an expected date of payment of January 15,2018.On December 31,2017,the fair value of the Gorilla shares had increased to $42 per share.Management irrevocably elect to classify the investment at fair value through OCI.
c.On July 1,2017,Koala acquired 45,000 shares (20%)of the outstanding shares of Black Bear at a price of $15 per share,giving it significant influence over Black Bear.Black Bear had net income of $600,000 for the six months ended December 31,2017 and declared and paid total dividends of $10,000 to its shareholders on December 31,2017.On December 31,2017,Black Bear's shares had a fair value of $19 per share.
Required:
Provide all journal entries required relating to these investments on July 1,2017 and December 31,2017,including any journal entries required relating to the change in fair value for the year.

Accepted Answer

a.Amortized cost investment in

Question 13

Which statement is not correct about "joint arrangements"?

Accepted Answer

A) Joint arrangements usually have a limited life and a defined set of objectives or activities. 
B) A joint arrangement is the same as a partnership for financial accounting purposes. 
C) Unanimous consent for all decisions is required of all parties. 
D) There is a contractually agreed sharing of control over economic activities. 
A) Joint arrangements usually have a limited life and a defined set of objectives or activities. 
B) A joint arrangement is the same as a partnership for financial accounting purposes. 
C) Unanimous consent for all decisions is required of all parties. 
D) There is a contractually agreed sharing of control over economic activities.

Question 14

Explain the nature of and the impact on the balance sheet and the income statement of at fair value through profit or loss securities and at fair value through OCI securities.

Accepted Answer

At fair value through profit or loss fin

Question 15

Quick Investment Company (QIC)began operations on January 1,2016.It acquired the following investments:
 
QIC earned interest of $12,000 during 2016.Dividends of $16,000 were declared on the FVPL shares it owned during 2016.Of that amount,$9,000 was received in December 2016 and $7,000 was received in January 2017 (note that the ex-dividend date for these shares was prior to the end of the year).How much would QIC's total income from its investments be on the profit or loss portion of its statement of comprehensive income for the year ended December 31,2016?

Accepted Answer

A) $21,000 
B) $28,000 
C) $48,000 
D) $58,000 
A) $21,000 
B) $28,000 
C) $48,000 
D) $58,000

Question 16

Explain the nature of and the impact on the balance sheet and the income statement of investments subsequently measured at amortized cost.

Accepted Answer

Amortized cost investments are non-strat

Question 17

Philips has a 50% joint operation interest in Josef.Based on the following information,what amount will be presented for current assets on Philips' proportionately consolidated balance sheet?

Accepted Answer

A) $500 
B) $550 
C) $775 
D) $1,050 
A) $500 
B) $550 
C) $775 
D) $1,050

Question 18

Fiesta Corp.purchases a $500,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

Accepted Answer

A) $4,367.24 
B) $9,039.40 
C) $30,000.00 
D) $34,367.24 
A) $4,367.24 
B) $9,039.40 
C) $30,000.00 
D) $34,367.24

Question 19

What factor is the most important in classifying an investment at fair value through other comprehensive income?

Accepted Answer

A) Whether the instrument is a derivative instrument. 
B) Whether management intends to sell the instrument shortly after purchase. 
C) Whether gains will be realized in the next operating cycle. 
D) Whether the instrument has a fixed maturity date. 
A) Whether the instrument is a derivative instrument. 
B) Whether management intends to sell the instrument shortly after purchase. 
C) Whether gains will be realized in the next operating cycle. 
D) Whether the instrument has a fixed maturity date.

Question 20

Which statement is correct about an at fair value through profit or loss investment?

Accepted Answer

A) The investment is recorded at fair value. 
B) Changes in fair value are recorded in OCI. 
C) The investment is recorded at amortized cost. 
D) The category cannot include debt instruments. 
A) The investment is recorded at fair value. 
B) Changes in fair value are recorded in OCI. 
C) The investment is recorded at amortized cost. 
D) The category cannot include debt instruments.

Fish Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.What is the premium or discount (rounded)?

Which investment could be classified at amortized cost?

Starts has a 60% joint operation interest in Fish.Based on the following information,what amount will be presented for current liabilities on Starts' proportionately consolidated balance sheet?

Super Control Group has the following investments: a)Explain how these investments will be classified and accounted for. b)How much income will be recorded in 2016 by Super Group for its investment in VWX? c)How much income will be recorded in 2016 by Super Group for its investment in ABC?

Which statement is not correct about non-strategic investments?

Classify each of the following items into one of the seven categories of financial assets relevant for financial reporting purposes.Select the category that best suits the situation given.

Fiesta Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

Which item is an example of a financial asset?

What is a financial asset?

Which statement is correct about non-strategic investments?

Which statement is not correct about "joint arrangements"?

Explain the nature of and the impact on the balance sheet and the income statement of at fair value through profit or loss securities and at fair value through OCI securities.

Explain the nature of and the impact on the balance sheet and the income statement of investments subsequently measured at amortized cost.

Philips has a 50% joint operation interest in Josef.Based on the following information,what amount will be presented for current assets on Philips' proportionately consolidated balance sheet?

Fiesta Corp.purchases a $500,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

What factor is the most important in classifying an investment at fair value through other comprehensive income?

Which statement is correct about an at fair value through profit or loss investment?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue and Recognition

Cash and Receivables

Inventories

Property, plant and Equipment

Intangible Assets, goodwill, mineral Resources, and Government Grants

Applications of Fair Value to Non-Current Assets

Filters

Exam 7: Financial Assets

Fish Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.What is the premium or discount (rounded)?

Which investment could be classified at amortized cost?

Starts has a 60% joint operation interest in Fish.Based on the following information,what amount will be presented for current liabilities on Starts' proportionately consolidated balance sheet?

Super Control Group has the following investments: a)Explain how these investments will be classified and accounted for. b)How much income will be recorded in 2016 by Super Group for its investment in VWX? c)How much income will be recorded in 2016 by Super Group for its investment in ABC?

Which statement is not correct about non-strategic investments?

Classify each of the following items into one of the seven categories of financial assets relevant for financial reporting purposes.Select the category that best suits the situation given.

Fiesta Corp.purchases a $100,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

Which item is an example of a financial asset?

What is a financial asset?

Which statement is correct about non-strategic investments?

Which statement is not correct about "joint arrangements"?

Explain the nature of and the impact on the balance sheet and the income statement of at fair value through profit or loss securities and at fair value through OCI securities.

Explain the nature of and the impact on the balance sheet and the income statement of investments subsequently measured at amortized cost.

Philips has a 50% joint operation interest in Josef.Based on the following information,what amount will be presented for current assets on Philips' proportionately consolidated balance sheet?

Fiesta Corp.purchases a $500,000 face value bond which matures in two years.The coupon rate is 6% and the market rate is 7%.How much premium or discount will be amortized in the first year?

What factor is the most important in classifying an investment at fair value through other comprehensive income?

Which statement is correct about an at fair value through profit or loss investment?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue and Recognition

Cash and Receivables

Inventories

Property, plant and Equipment

Intangible Assets, goodwill, mineral Resources, and Government Grants

Applications of Fair Value to Non-Current Assets

Filters