Identify how each investment would be classified from ABC Inc.s perspective: non-strategic (N), investment in associate (I),
Question:
1. Purchased 5,000 shares of Douglas Inc. to be held for about 30 days.
2. Purchased at par a $100,000, 5% five-year bond; interest is payable quarterly and the bond will be held until maturity.
3. Purchased 50,000 of the 80,000 authorized shares of Dolby Inc.
4. Purchased equipment costing $140,000 by issuing shares.
5. Purchased land costing $289,000 by borrowing $200,000 from the bank and issuing shares for the balance.
6. Signed a contract with two other organizations regarding a project to develop and market a new computer program; each investor has a 1/3 share in the project costs and revenues.
7. Purchased 80,000 Inco shares to be held for several years; Inco has over 5 million shares issued and outstanding.
8. Purchased 3,000 Perdu shares, representing a 25% ownership interest.
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Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
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