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Valuing Securities using Accounting Information

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 (

Securities Index

An index consists of the following securities Stock Shares Outstanding Yesterday's Price Today's Price A 1,000 $32 $38 B 4,000 $22 $23 C 6,000 $57 $55 If the index is value-weighted, what is the index level? Use yesterday as a base. Assume yesterday's index level is 1,000.

Calculate the total cost of securities purchased

Someone bought 320 shares of DNA at 35 3/4 from broker. He charges 1.6% for the transaction. Odd lot carry 1/8 of a dollar brokerage differential. a. Calculate the total commission b. Calculate total cost of securities

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 & Exchange Commission

In 2009, the Securities and Exchange Commission (SEC) caught Bernard Madoff (Ponzi scheme) in lies but disregarded many concerns. What do you think about the fact that the SEC, whose purpose is to make sure that laws are obeyed, ignored these facts?

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

Pricing securities

Calculate the pre-tax cost of debt by finding the rate that sets the present value of the bond equal to the cash flows. Prior to issuing new bonds, use the market price. After you issue new bonds, you have to use the net value. The flotation cost is 10%, so the net value is 90% of the market prices Market Price "Net Value Fo

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

Entries for bonds, amortization, Held-to-Maturity Securities

On January 1, 2008, Hi and Lois Company purchased 12% bonds, having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2008, and mature January 1, 2013, with interest receivable December 31 of each year. Hi and Lois Company uses the effective-interest m

Marketable securities

I'm looking to invest in short-term investment such as banker's acceptance,I am havign a hard time finding the crediable information. how would this company assist in a company's management goal? is this type of security safe and worth the hassel? which organization would benefit most from this type of security? Any suggestion

Weights Assigned to Individual Securities

3. The weights assigned to individual securities in a portfolio when computing the portfolio rate of return are: a. equal. b. based on the amount initially invested in each security. c. based on the current market value of each security. d. based on the betas of each security.

Valuing Stocks

Homework 1) Sybil gave her son Todd 1,000 shares of XYZ stock on January 16, 2007. The stock's high and low selling prices that day were $55 and $53. Sybil had purchased the stock in 2006 for $70 per share. At the beginning of 2008, Todd sold the shares for $62,000. Provide the details of both income an

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

Accounting II

1. Unruh Corp. began operations in 2007. An analysis of Unruh's equity securities portfolio acquired in 2007 shows the following totals at December 31, 2007 for trading and available-for-sale securities: Trading Available-for-Sale

Dale Company Seasonal Sales Volume

Dale Company experiences heavy sales in the summer and early fall, after which time it has excess cash to invest until the next spring. On November 1, 20x8, the company invested $194,000 in US Treasury Bills. The bills mature in 180 days at $200,000. Prepare entries to record the purchase on November 1; the adjustment to accrue

Debt Securities and Amortization Schedules

(Debt Securities) Presented below is an amortization schedule related to Kathy Baker Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2004, for $108,660. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/04 $108,660 12/31/05 $7,

Journal entries for securities transactions; gain or loss

E17-11 (Equity Securities Entries) Arantxa Corporation made the following cash purchases of securities during 2007, 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, purchase

Alvarez Corp available for sale securities: analyze transactions

P17-12 (Available-for-Sale Securities?Statement Presentation) Alvarez Corp. invested its excess cash in available-for-sale securities during 2006. As of December 31, 2006, the portfolio of available-for-sale securities consisted of the following common stocks. Security Quantity Cost Fair Value Keesha Jones, Inc. 1,000 shares

1) If a security can easily be converted to cash without a loss in value, it 2) According to the segmented markets theory, if most investors suddenly preferred to invest in short term securities and most borrowers suddenly preferred to issue long term securities there would be

1) If a security can easily be converted to cash without a loss in value, it a. is liquid b. has a high after tax yield c. has high default risk d. is illiquid 2) According to the segmented markets theory, if most investors suddenly preferred to invest in short term securities and most borrowers suddenly preferred to i