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

Question:

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

1. 10-year BCE bonds, purchased to earn interest.

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

3. One-year Government of Canada bonds, purchased to earn interest.

4. 180-day treasury bill, intended to be held to earn interest.

5. Bank of Montreal preferred shares, purchased to sell in the near term at a profi t.

6. Loblaw common shares, purchased to sell in the near term at a profi t.

7. 60% of the common shares of Pizzutto Holdings Corporation, a major competitor of Kroshka Holdings.

8. 22% of the common shares of Kesha Inc., one of Kroshka Holdings’ suppliers.


Instructions

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

b. Indicate whether each of the above investments would be classified as a current asset or non-current asset in Kroshka Holdings’ balance sheet.

c. For each investment that you classified as non-strategic, indicate the amount the investment will be reported at in the balance sheet assuming that Kroshka is a public company.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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...
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Related Book For  book-img-for-question

Accounting Principles Volume 2

ISBN: 978-1119502555

8th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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