The difference between orioles fair value and the

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Unformatted text preview: e fair value of Orioles was $10,000,000. The difference between Orioles' fair value and the book value of its identifiable net assets is attributable to $1,800,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Orioles during 2013: What amount would Sosa Enterprises report in its year-end 2013 balance sheet for its investment in Orioles Co.? A. $3,200,000. B. $3,180,000. C. $3,135,000. D. $3,027,000. 103.Smith buys and sells securities, which it typically classifies as available for sale. On December 15, 2013, Smith purchased $500,000 of Jones shares and elected the fair value option to account for the Jones investment. As of December 31, 2013, the Jones shares had a fair value of $525,000. In the 2013 financial statements, Smith will show (ignore taxes): A. Investment income of $25,000 in its income statement. B. Other comprehensive income of $25,000. C. Accumulated other comprehensive income of $525,000. D. An investment in Jones of $500,000. 104.Which of the following is not true about the fair value option? A. The fair value option is irrevocable. B. The fair value option must be elected for all shares of an investment in a particular company. C. Electing the fair value option for held-to-maturity investments simply reclassifies those investments as trading securities. D. All of the above are true. 105.Which of the following is not true when the fair value option is elected for an investment that would normally be accounted for under the equity method? A. No journal entry need be made to recognize the investor's portion of the investee's net income. B. Unrealized gains and losses on that investment are recognized in net income. C. No journal entry need be made to recognize the investor's portion of dividends paid by the investee. D. All of the above are true. 106.Under IAS No. 39, which is not a category for accounting for investments? A. Fair value through profit and loss. B. Fair va...
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This document was uploaded on 07/05/2013.

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