User Account

All Pages

The fair value of the shares held by sanborn

Assignment Help Accounting Basics
Reference no: EM13996122

On January 2, 2011, Sanborn Tobacco, Inc., bought 5% of Jackson Industry's capital stock for $90 million as a temporary investment. Sanborn realized that these securities normally would be classified as available-for-sale, but elected the fair value option to account for the investment. Jackson Industry's net income for the year ended December 31, 2011, was $120 million. The fair value of the shares held by Sanborn was $98 million at December 31, 2011. During 2011, Jackson declared a dividend of $60 million.

Required:

1. Would this investment be classified on Sanborn's balance sheet as held-to-maturity securities, trading securities, available-for-sale securities, significant-influence investments, or other? Explain.

2. Prepare all appropriate journal entries related to the investment during 2011.

3. Indicate the effect of this investment on 2011 income before taxes. 

Reference no: EM13996122

Questions Cloud

How do you draw the chemical equation : How do you draw the chemical equation including the transition state for Sn1 and Sn2 reactions for (CH3)3 - OH + HX and CH3(CH2)3(OH) + HX ?
An business development executive travels extensively : An business development executive travels extensively for business. Her company offers two options to offset her driving expenses. Option 1 provides a car allowance of 490 dollars per month and a mileage reimbursement of $0.34/mile for fuel, insuranc..
Determine demand function-inverse demand function for good : The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. Determ..
What accounts for the stability of a tertiary : What accounts for the stability of a tertiary carbocation, with all methyl substituents?
The fair value of the shares held by sanborn : Would this investment be classified on Sanborn's balance sheet as held-to-maturity securities, trading securities, available-for-sale securities, significant-influence investments, or other? Explain.
Various contemporary authors have researched backwards : Various contemporary authors have “researched backwards” very simple foods such as salt, eggs, cod, milk, etc. to demonstrate their concerns about food production, the economy, and health in the US. In other words, these analysts have looked at how f..
Elementary school quality from residential property values : The table on federal income tax rates facing various income groups suggests that the marginal tax rate in the United States has fallen. What would be your prediction as to how this decline in marginal tax rates could affect the quantity of Labor supp..
Why are sn1 reactions not considered stereospecifc : Why are SN1 reactions not considered stereospecifc, in contrast with SN2 reactions?
Faced by a firm in oligopolistic competition : Describe the demand and marginal revenue curves faced by a firm in a purely competitive market. Are they different from those faced by a firm in oligopolistic competition? If so, why?

Reviews

Write a Review

Accounting Basics Questions & Answers

  An outside manufacturer has offered to produce zets and

one of the materials used in the production of zets is obtained from a foreign supplier. civil unrest in the suppliers

  Prepare an income statement for may, a statement

Holden Graham started The Graham Co., a new business that began operations on May 1. The Graham Co. completed the following transactions during its first month of operations.

  Hoosier company manufactures and sells a single product the

hoosier company manufactures and sells a single product. the following costs were incurred during the companys first

  Determine basic earrings per share of common stock

A) calucate the basic earrings per share of common stock for the year ended Jan 31,2011

  Post pharmacy uses the following journals: sales journal

1.Post Pharmacy uses the following journals: sales journal, purchases journal, cash receipts journal,

  Kenneth change recently started a business during the

kenneth change recently started a business. during the first few days of operation mr. chang transferred 30000 from his

  How does my cash flow differ from my profit

How does my cash flow differ from my profit?

  What is loris productivity

Lori thinks that by redesigning the package, she can increase her total productivity to 133 care packages per day. What will be her new productivity?

  Pastore inc granted options for 1 million shares of its 1

pastore inc. granted options for 1 million shares of its 1 par common stock at the beginning of the current year. the

  Tony-bliar company uses a weighted-average perpetual

tony-bliar company uses a weighted-average perpetual inventory system. may 2 8 units were purchased at 12 per unit. may

  Polly enterprises manufactures lamps that normally sell for

polly enterprises manufactures lamps that normally sell for 75 each. there are 300 defective lamps in inventory which

  Computing the price fixing

An antitrust case launched more than a decade ago sent tremors throughout the academic community. Over the 1989-1991 period, the Department of Justice (DOJ) investigated a number of highly selective private colleges for price fixing. The investiga..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd