mba_fa_《financial_accounting》_习题答案8.pdf

CHAPTER 8 INVESTMENTS IN EQUITY SECURITIES BRIEF EXERCISES BE8–1 a. Comprehensive income includes the change in value assets that have been sold and in certain assets that the company has not sold. Net income only includes the changes in assets that have been sold. b. Through the first two years (‘01-’02) the prices of these investments increased by $11 and $73. In 2003 Merck shows an unrealized loss of $46. BE8–2 Bristol-Myers Squibb designated its Marketable Securities as Available-for-Sale Securities and as such reflected holding gains/losses (unrealized) in Comprehensive Income, not on the Income Statement. The $23 million reflected a change in the market value of the Securities which were still owned by the company. The asset section of the balance sheet will also show the change, with the carrying value of the Securities adjusted by the $23 million. BE8–3 a. Investment in Equity Securities (+A) 151 Equity in net income of affiliates (R, +SE) 151 b. The equity in net income of affiliates was deducted from the cash flow statement because the affilate income increased the company’s earnings but did not provide any cash to the company. The cash to the company would have come from dividends, but since no amount was deducted from the add-back to the cash flow statement, no cash was received from the affiliate companies. c. Since no dividends were received the asset increased by the amount of net income from affiliates recognized, $151 million. BE8–4 Goodwill is the amount paid above fair value when assets are acquired. P G, in its business growth strategy, has acquired other companies and has paid, collect