Exam 15: Investments and International Operations

A company had net income of $450,000 in 2012 and $620,000 in 2013. The company had average total assets of $2,500,000 in 2012 and $3,000,000 in 2013. Calculate the return on total assets for 2012 and 2013. Comment on the results.

Multinational corporations can be U.S. companies with operations in other countries.

Explain how held-to-maturity debt securities are accounted for at and after acquisition and how they are reported in the financial statements.

Return on total assets measures a company's ability to:

Long-term investments are reported in the:

Return on total assets is computed by dividing ___________ by __________.

The price of one currency stated in terms of another currency is called a foreign exchange rate.

A company reported net income for 2012 of $98,000 and $106,000 in 2013. It also reported net sales of $735,000 in 2012 and $798,000 in 2013. The company's average total assets in 2012 were $1,850,000 and $1,720,000 in 2013. Calculate this company's profit margin, total asset turnover, and return on total assets for 2012 and 2013. Comment on the results.

A company had net income of $2,785,000, net sales of $250,000,000, average total assets of $6,000,000, and equity investments of $40,000. Its return on total assets equals:

A company has net income of $130,500. Its net sales were $1,740,000 and its total assets were $2,750,000. Its profit margin equals 7.5%.

____________________________ are debt and equity securities that a company intends to actively manage and trade for a profit.

A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:

Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:

Micron owns 3,000 shares of JVT. JVT has 25,000 total shares of stock outstanding. JVT paid $3 per share in cash dividends to its stockholders. Micron should record a:

Return on total assets can be separated into the profit margin ratio and total asset turnover.

Sanuk purchased on credit £20,000 worth of parts from a British company when the exchange rate was $1.66 per British pound. At the year-end balance sheet date, the exchange rate increased to $1.69. Sanuk must record a gain of $600.

___________________________ are investments in securities that management intends to convert to cash within one year or the operating cycle, whichever is longer, and are readily convertible to cash.

Management's intent and the marketability of a security determine whether or not a security is classified as a long-term or short-term investment.

An investing company that owns more than ________ of another (investee) company's voting stock is presumed to have controlling influence over the investee.

The price of one currency stated in terms of another currency is referred to as the: