09-Fa-FSA-Final - Ram T. S. Ramakrishnan 2303, University...

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Ram T. S. Ramakrishnan 2303, University Hall, 996-3270 rramakri@uic.edu Open Book and Notes http://www.uic.edu/classes/actg/actg516rtr/ December 7, 2009 Monday Show all your work in the answer sheets. You will not get credit for a right answer unless you show all the steps in these sheets. As a courtesy to fellow test takers, please turnoff all pagers, telephones and PDA's. email UIN This course and its associated coursework are being administered under the policies of the University of Illinois at Chicago (UIC) College of Business Administration Honor Code. All students are expected to respect and uphold this code. Points Case Pages Estimated Time Glim 1 35 CapEx ExxonMobil 10 35 Kmart 5 35 ExxonMobil 10 80 Total 26 150 Signature First name Last name Choose Two of these three
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1 of 2 Glim Glim inc., a US company purchased three marketable securities Firm Investment in amounts as described in the table on the right on Jan 1, 2007. ONGC 175,000 $ HPCL 204,800 $ IDBI 231,655 $ The company did not purchase or sell any other marketable securities in 2007. On 31-Dec, 2007 Glim reported investments in marketable securities as follows: 80523 Table A 31-Dec-07 Firm Amortized cost* Unrealized Gains Unrealized Losses Fair Value Carrying Value ONGC $ 175,000 14,000 189,000 189,000 HPCL 204,800 19,200 185,600 185,600 IDBI 252,504 252,403 252,504 Ignore taxes for this question. The balance sheet as of 31-Dec, 2007 also had the following item: Accumulated other comprehensive income (19,200) The only source of other comprehensive income for Glim in that year was unrealized holding gains and losses on marketable securities classified as available-for-sale. * Amortized cost of security is the predicted value of a security at the time of purchase for accounting purposes. For equity securities, it is the cost. For debt securities it is original cost plus interest revenue earned but not received in cash. Questions 1 Identify which of the three categories: trading, available-for-sale or held-to-maturity each security belongs to. ONGC HPCL IDBI 2 None of the three investments paid dividends in 2007. What income was reported from the 3 securities in the income statement for the year ending 31-Dec 2007 ? Interest and Realized Gain Unrealized Gain dividend income ONGC HPCL IDBI 2 of 28.
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2 of 2 Glim 3 The market value of the 3 holdings on two dates are on the right: Firm 2-Jul-08 31-Dec-08 On 3-Jul 2008, Glim sold half of each of the holding ONGC 198,000 $ 102,000 Note that on 31-Dec 2008 HPCL 192,000 $ 98,600 Glim still only has half of the original purchases. IDBI 254,500 $ 139,000 None of the three investments paid dividends in 2008. What income will be reported from the 3 securities in the income statement for the year ending 31-Dec 2008 ? Interest and
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This note was uploaded on 02/27/2012 for the course FIN 132 taught by Professor Afda during the Spring '12 term at Centenary College New Jersey.

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09-Fa-FSA-Final - Ram T. S. Ramakrishnan 2303, University...

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