Intermediate Accounting Test 1 Exam Questions With 100% Correct Answers

Intermediate Accounting Test 1 Exam Questions With 100% Correct Answers The investment category for which the investor's "positive intent and ability to hold" is important is: - answerSecurities classified as held to maturity. All investments in debt and equity securities that don't fit the definitions of the other reporting categories are classified as: - answerSecurities available for sale Boulter, Inc. began business on January 1, 2013. At the end of December 2013, Boulter had the following investments in equity securities. How should the corresponding losses be reflected in the financial statements at December 31, 2013? Trading Available for sale Cost $60,000 $110,000 Fair Value $54,000 $107,500 - answerIncome Statement: $6,000 Accumulated Other Comprehensive Income in Shareholder's Equity: $2,500 Accumulated Other Comprehensive Income in the shareholders' equity section of the balance sheet reflects changes in the fair value of securities for which type of securities? - answerSecurities available for sale. Dyckman Dealers has an investment in Thomas Corporation 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: - answer$20,000 Unrealized holding gains and losses on securities available for sale would have the following effects on retained earnings: - answerGains: No change Losses: No change