CHAPTER 1
SOLUTIONS TO MULTIPLE CHOICE QUESTIONS, EXERCISES AND PROBLEMS
MULTIPLE CHOICE QUESTIONS
1. c
$180,000 - $160,000 = $20,000
$125,000 - $100,000 = 25,000
Total gain $45,000
2. a
$29,000 – $26,000 = $3,000
3. a
$207,544 – [(6% x $200,000) – (4% x $207,544)] = $203,846
4. d
Reclassification of unrealized loss on AFS securities sold $1,000 credit
Unrealized gain on AFS securities held at year-end 6,000 credit (1)
Total amount reported in OCI $7,000 credit
(1) $81,000 – ($100,000 – $25,000) = $6,000 unrealized gain
5. d
$5,000,000 + [40% x ($600,000 – $200,000)] = $5,160,000
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