Equity Value Versus Enterprise Value – Common questions: “In an M&A deal, does the buyer pay the Equity Value or the Enterprise Value to acquire the seller?” They are wealthy individuals or groups who are looking for a high return on their investments and are very discerning about the businesses in which they invest. 8:03: Problem #2: The Treatment of Cash. Examples of Financing Activities. Strickland Corporation has invested in debt securities. Which of the following is the correct journal entry to record the receipt of the usual semiannual interest payment? 2.3.5 Investments in Certain Securitization Entities 11 2.4 Applicability of Equity Method to Other Investments 12 2.4.1 Investments Held by Not-for-Profit Entities 12 2.4.2 Equity Method Investments Eligible for Fair Value Option 12 2.4.2.1 Availability of the Fair Value Option for Financial Instruments With a Substantive Future Rather than requiring cash payment for all sales, some firms offer credit to: A. keep current customers happy and attract new customers. If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment? Amazon Services, Inc. owns less than 2% of Nile's voting stock and plans to hold the stock for two years. Where would we find this information? Cash receipts from issuing shares or other equity instruments, for example, issuance of common stock and preferred stock, is that interest paid and interest received should be classified as operating cash flow because they enter into the determination of net income. We would look on the balance sheet. 8. This is the company's first and only stock investment. 8. The amount of interest accrued on December 31 (the company's year-end) would be: A company paid $37,800 to acquire 8% bonds with a $40,000 maturity value. The stock is classified as a stock investment with insignificant influence. The correct entry to record the purchase of the investment is: Debit Stock Investments $37,800; credit Cash $37,800. This investment is classified as: A company has an investment in 9% bonds with a par value of $100,000 that pays interest on October 1 and April 1. They are usually all equity. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share. D. government's regulations of the chemical industry. • Payments to acquire equity instruments of other entities • Payments at the time of purchase or soon before or after purchase to acquire property, plant, and equipment and other productive assets . A) Equity Investments is debited for $370,500 Question 35 All of the following are examples of noncash financing and investing except: Retirement of debt by issuing equity stock. The bonds mature in six years and are classified as a held-to-maturity security. Other types of risk that can affect equity investments include: Credit risk: a company could be unable to pay its debt. Acquire investments in subsidiaries - 3. For investors the draw of private equity is simple: Over the 25 years ended in March, PE funds returned more than 13% annualized, compared with about 9% for an equivalent investment in … Investing activities would include any changes to long term assets including fixed assets (also called property, plant and equipment), long term investments in notes receivable, or stocks or bonds of other companies, and intangible assets (patents, trademarks, etc.). Meanwhile, if a portion of the deal is with acquirer stock, the seller can often defer paying tax. 3. a. assets. Cash payments to acquire property, plant and equipment, intangibles and other long-term assets 2. Strickland intends to actively buy and sell this investment for profit. Intangibles and other long-lived assets 2 generally refers to liquid portion of the following is cash payments to acquire equity investments are quizlet correct entry record... 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