Investments in debt securities are classified for reporting purposes in one of three categories. List these three categories and explain which investments are included in each category. Also, briefly describe how the reporting differs for each category.
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The following answer points out the key phrases that should appear in students' answers. It is not intended to be an example of complete student response. It might be helpful to provide detailed instructions to students on how brief or in depth you want their answers to be.
Investments in debt securities are classified as held-to-maturity, trading, or available-for-sale securities. Held-to-maturity securities are debt securities that the company expects to hold until they mature, which means until they become payable. Trading securities are securities that the investor expects to sell in the near future. These investments are adjusted to fair value with the unrealized gain or loss included in net income. Available-for-sale securities are investments that do not fit the other two categories; they are not expected to be sold in the near future, yet they are not expected to be held to maturity either. These investments are adjusted to fair value with the unrealized gain or loss included in comprehensive income.
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Rhodes Corporation manufactures a product with the following standard costs: Direct materials (20 yards @ $1.85 per yard) $ 37.00 Direct labor (4 hours @ $12.00 per hour) 48.00 Variable factory overhead (4 hours @ $5.40 per hour) 21.60 Fixed factory overhead (4 hours @ $3.60 per hour) 14.40 Total standard cost per unit of output $121.00 Standards are based on normal monthly production involving
2,00 . direct labor hours (500 units of output). The following information pertains to the month of July: Direct materials purchased (16,00 . yards @ $1.80 per yard) $28,800 Direct materials used (9,400 yards) Direct labor (1,880 hours @ $12.20 per hour) 22,936 Actual factory overhead 16,850 Actual production in July: 460 units a. Compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable: (1) Materials purchase price variance (2) Materials quantity variance (3) Labor rate variance (4) Labor efficiency variance b. Give potential reasons for each of the variances. Be sure to consider inter-relationships among variances.
Most divorce fraud results from which of the following allegations? I. The plaintiff spouse claims that the defendant hid assets so they would not have to be shared or taken away. II. The plaintiff spouse claims that the values assigned to assets were unrealistically high, thus resulting in an unfair divorce settlement
a. I only b. II only c. I and II d. Neither I nor II
Why is it especially important to be able to identify and evaluate analogies?
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Through analysis of sales data, Price-Cutters retail store found that customers who bought peanut butter also tended to buy bananas. Price-Cutters was engaged in
A. behavioral analysis. B. syndicated surveying. C. structured sampling. D. focus group analysis. E. data mining.