Information related to marketable equity securities of Callahan Corporation appears on the next page. a. Assume these
Question:
Information related to marketable equity securities of Callahan Corporation appears on the next page.
a. Assume these securities are trading securities. Indicate the nature and amount of income recognized during 2013 and 2014 and the presentation of information about these securities on the balance sheet on December 31, 2013 and 2014.
b. Repeat part a assuming these securities are available-for-sale securities held as temporary investments of excess cash by Callahan Corporation.
c. Repeat part a assuming these securities represent long-term investments by Callahan Corporation held as available-for-sale securities.
d. Compute the combined income for 2013 and 2014 under each of the three treatments of these securities in parts a, b, and c. Why do the combined income amounts differ? Will total shareholders’ equity differ? Why or why not?
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen