Obtain Yahoo’s 2014 Annual Report online. Review the financial statements and th
ID: 2422210 • Letter: O
Question
Obtain Yahoo’s 2014 Annual Report online. Review the financial statements and the notes to the financial statements.
List the types of investments held by Yahoo (Trading securities, available-for-sale, equity-method investees, subsidiaries).
Assume Yahoo has only one investee in which it holds 45% ownership. Based on the basic financial statements, how much was the investee’s net income (loss) for 2014
Assume Yahoo has a 25% owned investee and it intends to hold the investment indefinitely. Also assume that the investee paid Yahoo $8M in dividends and Yahoo recorded the following journal entry:
Cash $8M
Dividend Income $8M
What would be the effect on the following items on Yahoo’s financials (overstated, understated, or no effect):
Circle one:
a) Cash OS US NE
b) Net Income OS US NE
c) Total Assets OS US NE
d) Contributed Capital OS US NE
What is the total fair value of Yahoo’s available-for-sale securities at year-end 2014?
Prepare the journal entry to record Yahoo’s share of earnings for fiscal year 2015 of its investees over which it has significant influence.
Assume Yahoo has one subsidiary that is 70% owned. How much is the total stockholders’ equity of Yahoo’s subsidiary at year-end 2014?
Yahoo has several available-for-sale securities, one category being ‘corporate equity securities’. Prepare the journal entry to record the change in fair value of Yahoo’s corporate equity securities from fiscal year 2013 to 2014.
Explanation / Answer
investments held:
1.
trading securities $5327412
reday to sale (alibaba) $39867789
susidiary $2489578
othe investment $550798
2.
investee income 1057863/.45
= $2350807
3.
cash overstated
net income overstated
total asset overstated
contributed capital no effect
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