Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Information regarding Carperk Company's individual investments in securities during its calendar-year 2013, along with the December 31, 2013, fair values, follows. a. Investment in Brava

Information regarding Carperk Company's individual investments in securities during its calendar-year 2013, along with the December 31, 2013, fair values, follows. a. Investment in Brava Company bonds: $449,150 cost, $488,226 fair value. Carperk intends to hold these bonds until they mature in 2018. b. Investment in Baybridge common stock: 29,500 shares; $357,074 cost; $388,139 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge. c. Investment in Buffa common stock: 12,000 shares; $184,152 cost; $198,516 fair value. This investment amounts to 3% of Buffas outstanding shares, and Carperks goal with this investment is to earn dividends over the next few years. d. Investment in Newton common stock: 3,500 shares; $102,406 cost; $100,665 fair value. Carperks goal with this investment is to reap an increase in fair value of the stock over the next three to five years. Newton has 30,000 common shares outstanding. e. Investment in Farmers common stock: 16,300 shares; $112,288 cost; $119,250 fair value. This stock is marketable and is held as an investment of cash available for operations. Required: 1. Identify whether each investment should be classified as a short-term or long-term investment. For each long-term investment, indicate in which of the long-term investment classifications it should be placed. (Select "NA" in classification of long-term investment, if the type of investment is short term.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions