Kroshka Holdings Corporation has several investments in debt and equity securities of other companies: 1. 10-year BCE

Question:

Kroshka Holdings Corporation has several investments in debt and equity securities of other companies:

1. 10-year BCE bonds, intended to be held until the bonds mature

2. 10-year GE bonds, intended to be sold if interest rates go down

3. 5-year Government of Canada bonds, intended to be sold if cash is needed, which is likely

4. 180-day treasury bill

5. Bank of Montreal preferred shares, purchased for the dividend income

6. TMX common shares, purchased to sell in the near term at a profit. These shares are part of an investment portfolio that is actively traded.

Instructions

(a) Indicate whether each of the above investments is a non-strategic or strategic investment.

(b) For each investment that you classified as non-strategic in part (a), indicate whether it is a trading investment, an investment that will be held until maturity to earn interest, or an investment that does not relate to these two categories.

(c) Indicate whether each of the above investments would be classified as a current or non-current asset on Kroshka Holdings' statement of financial position?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... 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... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...