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Unformatted text preview: omprehensive income is:
A. An increase.
B. A decrease.
C. No effect.
D. Cannot be determined given this information.
74. Seybert Systems accounts for its investment in Wang Engineering as available for sale. Seybert's balance
in accumulated other comprehensive income with respect to the Wang investment is a credit balance
of $20,000, and Seybert reports the investment at $100,000 on its balance sheet. Seybert purchased the
Wang investment for (ignore taxes):
D. Cannot be determined from this information.
75. Sloan Company has owned an investment during 2013 that has increased in fair value. After all closing
entries for 2013 are completed, the effect of the increase in fair value on total shareholders' equity would
A. Higher under the available-for-sale approach than under the trading-securities approach.
B. Lower under the available-for-sale approach than under the trading-securities approach.
C. The same amount under the available-for-sale and trading-securities approaches.
D Not possible to identify whether the available-for-sale or trading-securities approaches yield higher
. shareholders' equity given this information. 76. When investments are treated as available-for-sale, other comprehensive income (OCI) also includes the
tax effects associated with unrealized holding gains and losses. As a result:
A Accumulated other comprehensive income would be increased by the tax benefits typically associated
. with unrealized holding gains.
B. Other comprehensive income typically would be reduced by the tax expense associated with unrealized
C. Accumulated other comprehensive income would not be affected by taxes.
D. None of the above is correct.
77. The Guitar World (TGW) holds an investment that increased in fair value over 2013, and accounts for
that investment as available for sale. When considering taxes, TGW would:
A. Recognize tax expense on the income statement, and probably increase taxes payable.
B. Recognize tax expense on the income statement, and probably increase it...
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This document was uploaded on 07/05/2013.
- Spring '09
- Balance Sheet