Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 5 - Using Your Judgment - Financial Reporting - Instructions - Page 296: c

Answer

Investments are reported on P&G’s balance sheet as current assets. Note 1 (Significant Accounting Policies) states that investments are readily available marketable debt and equity securities. These securities are reported at fair value. Unrealized gains and losses on trading securities are recognized in income. Unrealized gains and losses relating to investments classified as available-for-sale are recorded as a component of accumulated "other" comprehensive income in stockholders’ equity.

Work Step by Step

As of June 30, 2009, P&G had a negative working capital (current assets less current liabilities) of 5,032,000,000. As of June 30, 2008, P&G’s positive working capital was $2,862,000,000.
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