Unrealized holding gains or losses which are

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17. Unrealized holding gains or losses which are recognized in income are from securities classified as a. held-to-maturity. b. available-for-sale. c. trading. d. none of these. C 18. Debt securities that are accounted for at amortized cost, not fair value, are A 19. Use of the effective-interest method in amortizing bond premiums and discounts results in B 20. Equity securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses as other comprehensive income and as a separate component of stockholders' equity are A 5
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B1. (10 points) During 2010 ABC Company engaged in the following transactions: Transaction 1. On 1/15/10 ABC declared a $2 per share cash dividend. At 1/15/10 ABC had 800,000 authorized, 475,000 issued and 25,000 treasury shares of $10 par common stock. The market price of the common was $15 on 1/15/10. 2. On 1/31/10 ABC declared a 15% stock dividend At 1/31/10 ABC had 800,000 authorized, 475,000 issued and 25,000 treasury shares of $10 par common stock. The market price of the common was $18 on 1/31/10. For the following 10 items indicate the dollar effect on ABC’s accounts. If there is no effect, on the account identified, then write no effect. a. The effect of Transaction 1 on ABC’s total assets is: no effect b. The effect of Transaction 1 on ABC’s Total Liabilities is: increase $900,000 c. The effect of Transaction 1 on ABC’s Total Stockholders’ Equity is: decrease $900,000 d. The effect of Transaction 1 on ABC’s Total Capital Stock is: no effect e. The effect of Transaction 1 on ABC’s Total Paid-In Capital is: no effect f. The effect of Transaction 2 on ABC’s total assets is: no effect g. The effect of Transaction 2 on ABC’s Total Liabilities is: no effect h. The effect of Transaction 2 on ABC’s Total Stockholders’ Equity is: no effect i. The effect of Transaction 2 on ABC’s Total Capital Stock is: 675,000 increase j. The effect of Transaction 2 on ABC’s Total Paid-In Capital is: 1,215,000 increase 6
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