Question
For each of the following investments, identify the (a) reason for the investment (non-strategic or strategic), (b) balance sheet classification (current or non-current asset), and
For each of the following investments, identify the (a) reason for the investment (non-strategic or strategic), (b) balance sheet classification (current or non-current asset), and (c) measurement reported on the balance sheet. Assume that the investor is a public company. The first one has been done for you as an example.
Investment (a)Reason (b)Classification (c)Measurement
1. 120-day treasury bill Non-strategic Current asset Amortized cost
2. Common shares purchased by a bank for resale in the near future at a gain
3. 15% of the common shares of a public company designated as FVTOCI
4. Five-year bonds purchased by a company to hold and earn interest
5. 10-year bonds purchased to sell in the near future at a gain
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