Chapter-5

Chapter-5 - 1 Chapter 5 Monday, March 12 OMIT Pg. 224...

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1 Chapter 5 Monday, March 12 OMIT Pg. 224 – Internal Control OMIT Pg. 234-235 – Taking Action OMIT Pg. 237 – Reporting Cash Flows Short Term Investments -When a corporation buys/invests in another corporation -It is a Current Asset account -On the balance sheet, “short term investments” is listed in between cash and accounts receivable -It is something that will last less than one year -Does NOT follow the Historical Cost Rule -Price on the balance sheet must reflect market value -There are adjusting entries that go along with Short Term Investments Dec. 2 – Purchased stock $20,000: Debit Short Term Investments, and credit Cash. Dec. 15 – Company pays us $1,500 in dividends: Debit cash, and credit Dividend Revenue. Dec. 31 – Value of investment is now $22,000: Debit Short Term Investments (2,000) credit Unrealized Gain (2,000) Income Statement 1. Revenues 2. Expenses 3. Other Revenues (Gain or Loss) -Dividend Revenue -Unrealized Gain/Loss -Realized Gain/Loss Unrealized vs. Realized
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Chapter-5 - 1 Chapter 5 Monday, March 12 OMIT Pg. 224...

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