Exam 7: Financial Assets

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?

Which statement is correct about derivative instruments?

Which statement is not correct about non-strategic investments?

Which statement is correct about subsidiaries?

Fisher Corporation has the following investments at September 30, 2012: What method of accounting can Fisher not use to account for its investment in Cookstown?

Star Corp. purchases a $100,000 face value bond which matures in two years. The coupon rate is 6% and the market rate is 7%. At what amount will the bond be recorded (rounded)?

On January 1, 2013, Ella Ltd. purchased 25% of the common shares of JB Inc. for $2,200,000. In 2013, JB reported net income of $280,000 and paid dividends of $100,000. Required: a. Which of the following conditions must be met for Ella to use the equity method to report its investment in JB? i. Ella owns at least 20% of the voting shares of JB. ii. Ella has control over JB. iii. Ella has a significant interest in JB. iv. Ella is able to exercise significant influence over JB. b. How much income would be reported by Ella in 2013 related to its investment in JB under the equity method?

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)?

Quick Investment Company (QIC)began operations on January 1, 2012. It acquired the following investments: QIC earned interest of $12,000 during 2012. Dividends of $16,000 were declared on the shares it owned during 2012. Of that amount, $9,000 was received in December 2012 and $7,000 was received in January 2013 (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 its regular income statement for the year ended December 31, 2012?

Which statement about investments is not correct?

Based on the following information, what amount will be presented for current assets on the consolidated balance sheet of Investor for its wholly owned subsidiary?

Which statement is not correct about strategic investments?

What should a debt investment be classified as when there is an intention to trade it?

What is the meaning of "control"?

A bond has a maturity value of $300,000 payable in 4 years. These bonds have a 7% coupon rate payable semi-annually, and the market yield was 4% when the bonds were purchased. How much premium or discount will be recorded upon purchase (rounded)?

Fisher Corporation has the following investments at September 30, 2012: What method of accounting will Fisher use to account for its investment in ABC, if this investment is classified as held for trading?

What is a "subsidiary"?

Fish Corp. purchases a $500,000 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?

Copi Corp. purchased a bond with a maturity value of $60,000 payable in five years. These bonds have a 7% coupon rate payable annually. Copi paid $65,195 for these bonds, giving a yield of 5%. Required: Prepare an amortization schedule that shows the amortized cost of this bond at the end of each of five years and the amount of interest income for each of those five years.

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?