Investment HW

Investment HW - FIN 3162 Investment & Business Combinations...

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FIN 3162 #1 Presented below are unrelated cases involving investments in equity securities. Case I. The fair value of the trading securities at the end of last year was 30% below original cost, and this was properly reflected in the accounts. At the end of the current year, the fair value has increased to 20% above cost. Case II. The fair value of an available-for-sale security has declined to less than forty percent of the original cost. The decline in value is considered to be other than temporary. Case III. An equity security, whose fair value is now less than cost, is classified as trading but is reclassified as available-for-sale. Instructions Indicate the accounting required for each case separately. #2. What is the accounting treatment caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Fox Company uses (a) the fair value method and (b) the equity method for accounting for
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This note was uploaded on 10/07/2010 for the course FIN 3162N taught by Professor Spencer during the Spring '10 term at Dowling.

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Investment HW - FIN 3162 Investment & Business Combinations...

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