Identifying why companies invest and classifying investments Garden Haven has excess cash of $15,000 at the end of the harvesting season. Garden Haven will need this cash in four months for normal operations. Requirements 1. What are some reasons why Garden Haven may choose to invest in debt or equity securities? 2. What type of classification would Garden Haven’s investment fall within— short-term or long-term? Why?

Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
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Identifying why companies invest and classifying investments

Garden Haven has excess cash of $15,000 at the end of the harvesting season. Garden Haven will need this cash in four months for normal operations.

Requirements

1. What are some reasons why Garden Haven may choose to invest in debt or equity securities?

2. What type of classification would Garden Haven’s investment fall within— short-term or long-term? Why?

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