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Chapter 13: Q2Q (page 658)
Question: What purpose does the variety in bond features (types and characteristics) serve?
Answer:
Variety in bond features helps investors reduce their risk and generate a high yield.
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Question: The following information relates to Moran Co. for the year ended December 31, 2017: net income \(1,245.7 million; unrealized holding loss of \)10.9 million related to available-for-sale debt securities during the year; accumulated other comprehensive income of $57.2 million on December 31, 2016. Assuming no other changes in accumulated other comprehensive income, determine (a) other comprehensive income for 2017, (b)comprehensive income for 2017, and (c) accumulated other comprehensive income at December 31, 2017.
BE13-2 (L01) Upland Company borrowed \(40,000 on November 1, 2017, by signing a \)40,000, 9%, 3-month note. Prepare Upland’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry.
Question: E13-1 (L01) (Balance Sheet Classification of Various Liabilities) How would each of the following items be reported on the balance sheet? (a) Accrued vacation pay. (j) Premium offers outstanding. (b) Estimated taxes payable. (k) Discount on notes payable. (c) Service warranties on appliance sales. (l) Personal injury claim pending. (d) Bank overdraft. (m) Current maturities of long-term debts to be paid (e) Employee payroll deductions unremitted. from current assets. (f) Unpaid bonus to officers. (n) Cash dividends declared but unpaid. (g) Deposit received from customer to guarantee (o) Dividends in arrears on preferred stock. performance of a contract. (p) Loans from officers. (h) Sales taxes payable. (i) Gift certificates sold to customers but not yet redeemed.
Question: 13-17 (L04) (Ratio Computations and Discussion) Sprague Company has been operating for several years, and on December 31, 2017, presented the following balance sheet.
| SPRAGUE COMPANY | |||
| BALANCE SHEET | |||
| DECEMBER 31, 2017 | |||
Cash | \(40,000 | Accounts payable | \)80,0000 |
Receivables | \(75,0000 | Mortgage payable | \)140,000 |
Inventory | \(95,000 | Common stock (\)1 par) | \(150,000 |
Plant assets (net) | \)220,000 | Retained earnings | \(60,000 |
\)430,000 | \(430,000 | ||
The net income for 2017 was \)25,000. Assume that total assets are the same in 2016 and 2017.
Instructions
Compute each of the following ratios. For each of the four, indicate how it is computed and its significance as a tool in the analysis of the financial soundness of the company.
(a) Current ratio. (C) Debt to assets ratio.
(b) Acid-test ratio. (d) Return on assets.
Where can authoritative IFRS be found related to investments?
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