Focus on Trading Securities

Tanner-UNF Corporation acquired as a long-term investment $240 million of 7% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210 million.

1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018, and interest on December 31, 2018, at the effective (market) rate.
3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $190 million. Prepare the journal entries necessary to record the sale

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
  

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase. (Round weighted average cost per unit to two decimals.)
  

Dollar Peg for Hong Kong. The Hong Kong dollar has long been pegged to the U.S. dollar at 7.75 . When the Chinese yuan was revalued in July 2005 against the U.S. dollar from 8.31 to 8.12​, how did the value of the Hong Kong dollar change against the​ yuan? The original​ HK$/Yuan cross rate was ​HK$ nothing​/Yuan. ​(Round to four decimal​ places.)

If Germans purchase many additional U.S. automobiles next year,

Select one:

a. the supply of dollars currently in the New York currency market remains constant.

b. the freely-floating euro to dollar exchange rate would become pegged

c. the U.S. trade surplus next year will most certainly increase.

d. the demand for dollars in the Frankfurt currency market will most likely increase

A foreign exchange student with limited knowledge of the U.S. health care system has ask you to explain the current health care reform movement in the U.S.. Please provide a summary of the key elements of the various reform initiatives and how they may impact the system. Since your audience does not have a knowledge or appreciation of the current system, a limited historical review/explanation may be needed.

A recent FCC report stated that80% of all U.S. adults are internet users. In a poll run recently by PEW research of 3.011 adults, 2,478 said that they use the internet. A) Test the claim of the FCC at the .05 level. B) If the FCC claim were that more than 80% of all U.S. adults use the internet, how would that change your alternative hypothesis and your reject region?

• Utilize the dynamic aggregate demand and aggregate supply models to analyze the macroeconomic factors that led to the 2007–2009 recession.
• How were GDP, inflation, and unemployment affected during the recession, and how does the model show this?
• What monetary policies and fiscal policies were implemented during the recession?
• How did the recession affect U.S. trade relations and the U.S. dollar exchange rate?

Alex is taking two courses; algebra and U.S. history. Student records indicate that the probability of passing algebra is 0.33, that of failing U.S. history is 0.33, and that of passing at least one of the two courses is 0.85. Find the probability of the following.

(a) Alex will pass history.


(b) Alex will pass both courses.


(c) Alex will fail both courses.


(d) Alex will pass exactly one course.

In addition to preparing financial statements in accordance with GAAP, U.S. companies may be required, in the near future, to prepare financial statements according to International Financial Reporting Standards (IFRS). If the United States adopted IFRS standards, what would be the advantages and disadvantages? Does it make sense for U.S. companies to change to IFRS? How would IFRS impact a comparative analysis of an organization's financial statements?