MGT120H5 Lecture 6: MGT120-Financial Accounting-Week 6
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MGT120H5 Full Course Notes
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Investments that a company plans to hold for one year or less. Invest cash temporarily and get a return: most liquid asset after cash (can be converted to cash quickly, ex. Celestica inc. purchases mccain foods ltd. shares on dec. 18, paying ,000 cash. Dec. 27, celestica receives a cash dividend of ,000 from mccain (dividend = return on share investment; cash coming in) Celestica year ends dec. 31, and investment in mccain has current market value of ,000 on this date. Gain, because market value (,000) is greater than celestica"s investment cost: unrealized gain, because celestica has not yet sold investment. If celestica investment in mccain shares had decreased in value to ,000. Unrealized loss; because celestica has not yet sold the investment: dec. 31. Don"t need to say realized , just gain/loss . Loss: unrealized gains/losses are on paper only; not sold yet. On income statement, other revenue, gains or other expenses, losses .
