In December 2010, Rangers Inc. invested $100,000 of idle cash in U.S. Treasury notes. The notes mature
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1. According to GAAP, how should the investment in U.S. Treasury notes be classified for purposes of preparing a statement of cash flows for the year ended December 31, 2010? Explain your answer.
2. If the purchase of the notes is classified as an operating rather than an investing activity, is the information provided to outside readers free from bias? Explain.
3. As controller for Rangers, what would you do in this situation? What would you tell the treasurer?
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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