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Unformatted text preview: tion that Dyckman accounts for as a trading
security. Thomas Corporation shares are publicly traded on the New York Stock Exchange, and the
prevailing price on that exchange indicates that Dyckman's investment is worth $20,000. However,
Dyckman management believes that the stock market is generally overvalued, and their analysis of
the Thomas investment suggests to them that it is worth $18,000. Dyckman should carry the Thomas
investment on its balance sheet at:
C. Either $18,000 or $20,000, as either are defensible valuations.
D. $19,000, the midpoint of Dyckman's range of reasonably likely valuations of Thomas.
46. Nichols Enterprises has an investment in 25,000 shares of Elliott Electronics that Nichols accounts for as
a security available for sale. Elliott shares are publicly traded on the New York Stock Exchange, and The
Wall Street Journal quotes a price for those shares of $10 a share, but Nichols believes the market has
not appreciated the full value of the Elliott shares and that a more accurate price is $12 a share. Nichols
should carry the Elliott investment on its balance sheet at:
C. Either $250,000 or $300,000, as either are defensible valuations.
D. $275,000, the midpoint of Nichols' range of reasonably likely valuations of Elliott. 47. Anthers Inc. bought the following portfolio of trading securities near the end of 2013. What amount will be reported in the balance sheet for this portfolio at December 31, 2013, and how will
it be classified? A.
D. Option a
Option d 48. On January 1, 2013, Nana Company paid $100,000 for 8,000 shares of Papa Company common stock.
These securities were classified as trading securities. The ownership in Papa Company is 10%. Papa
reported net income of $52,000 for the year ended December 31, 2013. The fair value of the Papa stock
on that date was $45 per share. What amount will be reported in the balance sheet of Nana Company for
the investment in Papa...
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This document was uploaded on 07/05/2013.
- Spring '09
- Balance Sheet