question archive Walsh College ACC 503 1) Newberry purchased XYZ bonds for $80,000 on 1/1/20 and classified the bonds as available-for-sale
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1) Newberry purchased XYZ bonds for $80,000 on 1/1/20 and classified the bonds as available-for-sale. The year-end values of these bonds for years 2020-2022 respectively were $82,000, $79,000, and $75,000. Suppose Newberry erroneously accounted for these securities as if they were "Trading" since their purchase. Net Income for 2022 would be:
Select one:
a.$5,000 understated
b.$4,000 understated
c.$1,000 understated
d.$5,000 overstated
e.$7,000 overstated
2) Bonds purchased at a discount that are classified HTM should be on the balance sheet at
Select one:
a.Cost
b.Amortized cost
c.Fair value
d.Lower of cost or market
e. Higher of cost or market
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