Question 10 3 pts Which of the following statements is false

Question 10 3 pts Which of the following statements is false (applying GAAP wherever appropriatel? O All semi-annual bond interest entries are identical if the straight-line amortiration method is uned. O t the #1 ranked per share efflect is less than basic EPS, then only hask is reported, not diluted O After a hond is issued, at a discount, total cash interest paid will be less than total interest expense O Diluted eamings per share represents a \"what if: worst case warning to the common shareholders D Question 11 3 pts Fox Co. buys 115,000 shares of Owl Co. common stock directly this purchase. Fox intends to hold the stock indefinitely, Owl Co. which had from 500,000 outstanding common shares before Which accounting method should Fox use to report this investment? O Fair Value

Solution

Solution 10:

The false statment is \"If the #1 ranked per share effect is less than basic EPS, then only basic is reported not diluted\"

Hence 2nd option is correct.

Solution 11:

Total holding of fox company in Owl company = 115000 / 500000 = 23%

As holding is greater than 20%, therefore Fox should use equity method of accounting for this investment.

Solution 5:

The false statement is \"An advantage of debt financing over equity financing is that debt financing need not be repaid\"

Debt financing always need to be repaid at some point of time.

Hence 2nd option is correct.