A company invests $100,000 in U.S. Savings Bonds. It also invests $100,000 in another company's stock. How are these transactions represented on the income statement, balance sheet, and cash flow statement?
2007-09-20 15:10:57 · 1 answers · asked by Jay J 1 in Business & Finance ➔ Other - Business & Finance
Both of them are cash outflows in investing activities in the cash flow statement. Regarding the savings bonds, if they're maturing within 12 mths, place them as short-term investments under current assets, otherwise they're non current or long-term assets. Regarding the investment in another company's stock, if the intention is to hold them for long term, place them in long term assets. If the holding is between 20% and 50% of the investee, you have to call it investment in associated company and adopt equity a/cg. If the holding is > 51% of the investee, you have to call it investment in subsidiary and consolidate the a/cs of the subsid. at year-end. These are the simple rules, but it's more complicated than this.
2007-09-20 15:43:15 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋