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Classifying Disclosures and Analyzing Financial Statement Impact see an item affected on the face of the balance sheet and/or on the face of the income

image text in transcribed Classifying Disclosures and Analyzing Financial Statement Impact see an item affected on the face of the balance sheet and/or on the face of the income statement. 2. A loan to a 5% shareholder was made on June 30 of the current year for $10,000. Interest is due annually beginning one year from the origination of the loan. 3. On January 15 of the following year, a business component met the criteria to be classified as held for sale. At that time, impairment is estimated to be $30,000. 4. Short-term investments are valued at Level 1 in the fair value hierarchy for $40,550. Total net unrealized gain (affecting net income) related to the investments is $1,500. 5. Depreciation is determined on a straight-line basis for buildings and leasehold improvements over 2 to 40 years. 6. On February 1 of the following year, the company declared a quarterly cash dividend of $0.40 per share, payable on March 15 for shareholders of record on March 10 . 7. Goodwill and other acquired intangible assets with indefinite lives are not amortized but are tested for impairment annually. 8. Equipment is measured at fair value of $27,000 on a nonrecurring basis using significant unobservable inputs (Level 3). The total related impairment loss is $3,000. 9. Land was sold to the company president at a price significantly under its appraised value. 10. All highly liquid investments with an original maturity of 90 days or less are classified as cash equivalents

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