Share
Explore BrainMass

Valuing Securities using Accounting Information

Equity Securities Entries and Disclosures

Parrot Company has the following securities in its investment portfolio on December 31, 2010 (all securities were purchased in 2010): 3,000 shares of Ames Co. common stock which cost $58,500 10,000 shares of Master Ltd. common stock which cost $580,000 6,000 shares of Kong Company preferred s

Analyze the types of securities and financial markets and propose a new type of market that would be better than anything in existence today. Please be as creative as you like.

ââ?¬¢ Analyze the types of securities and financial markets and propose a new type of market that would be better than anything in existence today. Please be as creative as you like. ââ?¬¢ Propose a new financial system that would provide all the services of a bank or credit union, but would also be completely self-reg

Management of Cash and Marketable Securities for J-Mart's lockbox system

J-Mart, a nationwide department store chain,processes all its credit sales payments at its suburban Detroit headquarters. The firm is considering the implementation of a lockbox collection system with an Atlanta bank to process monthly payments from its southeastern region. Annual credit sales collections from the region are $60

Debt and Equity Securities for Jodelie Odelie Company

See the attached file. Jodelie Odelie Company has a fairly large portfolio of both debt and stock securities. Here's the portfolio at the beginning of 2009. All securities were purchased on the first day of the year. DEBT SECURITIES FMV at Stated Effective Interest Security

Long-Term Equity Securities, Temporary Decline, Equity Method

See attached file for proper format. 1. (2) The following information pertains to Lark Corp's long-term equity securities portfolio: December 31 2011 2010 Cost $200,000 $200,000 Fair Value 240,000 180,000 Difference between cost and market values are considered to be temporary. The decline

1. The BCD Partnership is being formed by three equal partners, Beta Corporation, Chi Corporation, and Delta Corporation. The partners' tax year-ends are June 30 for Beta, September 30 for Chi, and October 31 for Delta. The BCD partnership's natural business year ends on January 31. a. What tax year(s) can the partnership elect without IRS permission? b. What tax year(s) can the partnership elect with IRS permission? c. How would the answer in part a and b change if Beta, Chi, and Delta own 4%, 4%, and 92%, respectively, of the partnership? 2. Liquidating Distribution. Marinda is a one-third partner in the MWH Partnership before she receives $100,000 cash as a liquidating distribution. Immediately before Marinda receives the distribution, the partnership has the following assets: Assets Partnership's Basis FMV Cash $100,000 $100,000 Marketable securities 50,000 90,000 Investment land 90,000 140,000 Total $240,000 $330,000 At the time of the distribution, the partnership has $30,000 of outstanding liabilities, which the three partners share equally. Marinda's basis in her partnership interest before the distribution was $80,000, which includes her share of liabilities. What are the amount and character of the gain or loss recognized by Marinda and with the MWH Partnership on the liquidating distribution? 3. Passive Income Tax. Oliver organized North Corporation 15 years ago. The corporation made an S election last year after it accumulated $60,000 of E&P as a C corporation. As of December 31 of the current year, the corporation has distributed nine of its accumulated E&P. in the current year, North reports the following results: Dividends from domestic corporations $60,000 Rental income 100,000 Services income 50,000 Expenses related to rental income 30,000 Expenses related to services income 15,000 Other expenses 5,000 The corporation has not provided significant services nor incurred substantial costs in connection with earning the rental income. The services income is derived from the active conduct of a trade or business. a. Is North subject to excess net passive income tax? If so, what is its tax liability: b. What is the effect of the excess net passive income tax liability on North's pass-throughs of ordinary income and separately stated items? c. What advice would you give North regarding its activities?

1. The BCD Partnership is being formed by three equal partners, Beta Corporation, Chi Corporation, and Delta Corporation. The partners' tax year-ends are June 30 for Beta, September 30 for Chi, and October 31 for Delta. The BCD partnership's natural business year ends on January 31. a. What tax year(s) can the partnership elect

As a result of highly profitable operations over a number of years, Eastern Manufacturing Corporation accumulated a substantial investment portfolio. In the audit of the financial statements for the year ended December 31, 20X0, the following information came to the attention of the corporation's independent auditor (CPA): 1. The manufacturing operations of the corporation resulted in an operating loss for the year. 2. In 20X0, the corporation placed the securities making up the investment portfolio with a financial institution that will serve as custodian of the securities. Formerly, the securities were kept in the corporation's safe deposit box in the local bank. 3. On December 22, 20X0, the corporation sold and then repurchased on the same day a number of securities that had appreciated greatly in value. Management stated that the purpose of the sale and repurchase was to establish a higher cost and book value for the securities and to avoid the reporting of a loss for the year. Questions A. Under what conditions would the CPA accept a confirmation of the securities on hand from the custodian in lieu of inspecting and counting the securities? B. What disclosure, if any, of the sale and repurchase of the securities would the CPA recommend for the financial statements?

Can you help me get started with this assignment? As a result of highly profitable operations over a number of years, Eastern Manufacturing Corporation accumulated a substantial investment portfolio. In the audit of the financial statements for the year ended December 31, 20X0, the following information came to the attention

Valuing Stocks, paying dividends good for shareholders?

Increasing growth may require investment from the firm and money spent on investment cannot be used to pay dividends. On the one hand, cutting the firm's dividend to increase investment will raise the stock price if and only if the new investment has a positive NPV. Discuss why.

McKnight Brothers Investments Securities

Question 7 At December 31, 2009, McKnight Brothers Corp. had the following investments that were purchased during 2000, its first year of operations: Cost Fair Value Trading Securities: Security A $ 700,000 $ 725,000 B 210,000 200,000 Totals $ 910,000 $ 925,000 Securities Available for Sa

Securities and Portfolios

Question file attached. Problem Hints: Question 2 asks about your friend that now would demand 30% return instead of the 20% that was originally part of your loan. Since you are receiving 20% on the loan, at the end of the year your friend would give you $120 (100 principal + 20 interest). Since your friend demands a 30% rat

Problem #2 Avalon Corp Trading Securities

Part Two- Problem 2 Avalon Corp had the following transactions relating to their trading securities portfolio. This is the first year that they have made these investments. February 1st- Bought 1,000 shares of IBM for $75 per share and paid brokerage fees of $1,000. April 1st- Bought $100,000 of 8% U.S. Treasury Bond

Yields on marketable securities; trade credit discounts

1. Your firm invests in only three different classes of marketable securities: commercial paper, Treasury bills, and federal agency securities. Recently, yields on these money market instruments of three months' maturity were quoted at 6.10, 6.25, and 5.90 percent. Match the available yields with the types of instruments your fi

Trading and Available-for-Sale Securities Entries

Can you help me get started with this assignment? (Trading and Available-for-Sale Securities Entries) McElroy Company has the following portfolio of investment securities at September 30, 2010, its last reporting date. Trading Securities Cost Fair Value Horton, Inc. common (5,000 Shares) $215,000 $200,000 Monty, Inc.

A corporation acquires new funds only when its securities are sold: in the secondary market by an investment bank in the primary market by an investment bank in the secondary market by a stock exchange broker in the secondary market by a commercial bank

10. A corporation acquires new funds only when its securities are sold: in the secondary market by an investment bank in the primary market by an investment bank in the secondary market by a stock exchange broker in the secondary market by a commercial bank 11. Which of the following is no

E 12-10

E 12-10 Securities available-for-sale; adjusting entries The accounting records of Jamaican Importers Inc. at January 1, 2011, included the following: Assets: Investment in IBM common shares $1,345,000 Less: Fair value adjustment (

Evaluate the use of heuristics in valuing a firm

Consider the following excerpt from a prudential report on Wal-Mart, dated May 13, 2003. The report states: We are maintaining our Hold rating on Wal-Mart as we believe the stockâ??s current valuation of 28 times our 2003 EPS estimate of $2.01 adequately reflects the company 13% 5- year EPS growth rate...Wal-Mart is currentl

Donald Platten convicted of Securities and Tax fraud

Critique the attached document: Is it clearly written? Does it give the reader ideas for further research? Does it add to your knowledge? Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASE Friday, August 21, 2009 Boca Raton Man Convicted of Securities Fraud, Tax Fraud WASHINGTON - Donald Platt

Unrealized loses for available-for-sale securities

See attached file. When a company has an unrealized loss/gain from their available-for-sale securities, the balance in the Securities Fair Value adjustment account is supposed to be added or subtracted. Since this account doesn't have a normal balance I don't know when to add or subtract losses or gains or if I'm supposed to

Research and describe Ford and UPS securities

Conduct research on the selected securities (Ford and UPS) Examine the organizations' 10K and investment reports, general economic data, and Federal Reserve data. Describe the selected securities.

Securities Valuation: Plantics Inc, Magic Kelly Productions

The book is: Aswath Damodaran, Investment Valuation, Tools and Techniques for Determining the Value of Any Asset, Second University Edition, John Wiley & Sons, 2002 [ISBN 0-471-4190-5 (paper)] 1. Magid's operating income after taxes last year was $55 million, while net income was $30 million. Magid paid normal cash divide

Arantxa Corporation: Equity Securities Journal Entries

Arantxa Corporation made the following cash purchases of securities during 2008, which is the first year in which Arantxa invested in securities. 1. On January 15, purchased 10,000 shares of Sanchez Company's common stock at $33.50 per share plus commission $1,980. 2. On April 1, purchased 5,000 shares of Vicaio Co.'s co

Value and earnings for available-for-sale and trading securities

Presented below are three unrelated situations involving equity securities: Situation 1: An equity security, whose market value is currently less than cost, is classified as available-for-sale but is to be reclassified as trading. Situation 2: A noncurrent portfolio with an aggregate market value in excess of cost includ

Diluted EPS & Securities

1. Ren Inc. owns shares of Stimpy Corporation stock classified as available-for-sale securities. At December 31, 2006, the available-for-sale securities were carried in Ren's accounting records at their cost of $875,000, which equals their market value. On September 21, 2007, when the market value of the securities was $1,400,00