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NEW QUESTION: 1
Viper Motor Company, a publicly traded automobile manufacturer located in Detroit, Michigan, periodically invests its excess cash in low-risk fixed income securities. At the end of 2009, Viper's investment portfolio consisted of two separate bond investments: Pinto Corporation and Vega Incorporated.
On January 2, 2009, Viper purchased $10 million of Pinto's 4% annual coupon bonds at 92% of par. The bonds were priced to yield 5%. Viper intends to hold the bonds to maturity. At the end of 2009, the bonds had a fair value of $9.6 million.
On July I, 2009, Viper purchased $7 million of Vega's 5% semi-annual coupon mortgage bonds at par. The bonds mature in 20 years. At the end of 2009, the market rate of interest for similar bonds was 4%. Viper intends to sell the securities in the near term in order to profit from expected interest rate declines.
Neither of the bond investments was sold by Viper in 2009.
On January 1,2010, Viper purchased a 60% controlling interest in Gremlin Corporation for $900 million.
Viper paid for the acquisition with shares of its common stock.
Exhibit 1 contains Viper's and Gremlin's pre-acquisition balance sheet data.

Exhibit 2 contains selected information from Viper's financial statement footnotes.

What is the appropriate adjustment, if any, if the Pinto bonds are reclassified as available-for-sale securities during 2010?
A. The difference between the fair value and the carrying value on the date of reclassification is recognized in Viper's other comprehensive income.
B. No adjustment is necessary because reclassification to/from available-for-sale is strictly prohibited under U.S. GAAP and IFRS.
C. Any unrealized gain or loss, as of the date of reclassification, is immediately recognized in Viper's net income.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Reclassifying a hcld-to-maturity security to availablc-fbr-sale involves siating the investment on the balance sheet at fair value and recognizing the difference in the fair value and the carrying value as other comprehensive income. (Study Session 5, LOS 21.a)

NEW QUESTION: 2
Which of the following would be a circumstance that would lead to the impairment of a long-term asset?
A. significant decreases in the market value of the asset
B. current period operating or cash flows that are smaller than the previous periods
C. any change in the legal or business environment
Answer: A
Explanation:
Significant decreases in the market value of the asset will lead to an impairment of that asset and must be written down.

NEW QUESTION: 3
An organization has 3 sites; 1 Headquarters (HQ) site and 2 remote sites. The remote sites are connected to the HQ through site-to-site VPNs and phone communication is done using standard SIP. There is an issue with VOIP calls where one side cannot hear the other over the phone. As a test, they decide to disable protocol inspection for SIP. How can this be achieved?
A. Create a new UDP 5060 service, change the protocol type to None
B. Select the existing SIP service, change the protocol to None in advance settings.
C. Create a new TCP 5060 service, change the protocol type to None
D. Select the existing SIP Service, change the Protocol type to None
Answer: B