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WK5 Assignment 3.docx? Eye Openers 1. Why might a business invest in another company’s stock? 2. If a bond is purchased between interest payment periods, how is the accrued interest treated? 3. Why would there be a gain or loss on the sale of a bond investment? 4. When is using the cost method the appropriate accounting for equity investments? 5. How does the accounting for a dividend received differ between the cost method and the equity method? 6. How are brokerage commissions treated under the cost method of accounting for equity investments? 7. How is the income of the investor impacted by equity method investments? 8. If an investor owns more than 50% of an investee, how is this treated on the investor’s financial statements? 9. Google Inc. recently purchased all of the outstanding common stock of YouTube. Which is the parent company, and which is the subsidiary company in this transaction? 10. What is the major difference in the accounting for a portfolio of trading securities and a portfolio of available-for-sale securities? 11. If Valuation Allowance for Trading Investments has a credit balance, how is it treated on the balance sheet? 12. Are held-to-maturity securities (a) equity investments,(b) debt investments, or (c) both? 13. How would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be disclosed in the financial statements? 14. What would cause Unrealized Gain (Loss) on Available-for-Sale Investments to go from a $12,000 debit balance at the beginning of the year to a $1,000 credit balance at the end of the year? 15. What is the evidence of the trend toward fair value accounting? 16. What are some potential disadvantages of fair value accounting? EX 13-19.jpg????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????