Question 1

All of the following factors would be signs of an investor's significant influence over an investee except

Accepted Answer

A)  the investor has representation on the investee's board of directors. 
B)  the investor participates in the investee's policy-making process. 
C)  there are immaterial transactions between the investor and the investee. 
D)  the common stock held by other stockholders is dispersed. 
A)  the investor has representation on the investee's board of directors. 
B)  the investor participates in the investee's policy-making process. 
C)  there are immaterial transactions between the investor and the investee. 
D)  the common stock held by other stockholders is dispersed.

Question 2

Sandafor Company had these transactions pertaining to stock investments:
Feb 1 Purchased 2,400 shares of BFF common stock (2% of outstanding shares) for $16,500 cash.
July 1 Received cash dividends of $0.80 per share on BFF common stock.
Sept. 1 Sold 800 shares of BFF common stock for $7,900
Dec. 1 Received cash dividends of $.80per share on BFF common stock.
Instructions
Journalize the transactions.

Accepted Answer

The answer of Sandafor Company had these transactions pertaining to...

Question 3

At the end of the first year of operations, the total cost of the trading securities portfolio is $179,000 and the total fair value is $174,000. What should the financial statements show?

Accepted Answer

A)  A reduction of an asset of $5,000 and a realized loss of $5,000. 
B)  A reduction of an asset of $5,000 and an unrealized loss of $5,000 in the stockholders' equity section. 
C)  A reduction of an asset of $5,000 in the current assets section and an unrealized loss of $5,000 under "Other expenses and losses." 
D)  A reduction of an asset of $5,000 in the current assets section and a realized loss of $75,000 under "Other expenses and losses." 
A)  A reduction of an asset of $5,000 and a realized loss of $5,000. 
B)  A reduction of an asset of $5,000 and an unrealized loss of $5,000 in the stockholders' equity section. 
C)  A reduction of an asset of $5,000 in the current assets section and an unrealized loss of $5,000 under "Other expenses and losses." 
D)  A reduction of an asset of $5,000 in the current assets section and a realized loss of $75,000 under "Other expenses and losses."

Question 4

Which of the following is not a method of accounting for stock investments?

Accepted Answer

A)  Cost method. 
B)  Stock method. 
C)  Consolidated financial statements. 
D)  Equity method. 
A)  Cost method. 
B)  Stock method. 
C)  Consolidated financial statements. 
D)  Equity method.

Question 5

Short-term investments are securities that are readily marketable and intended to be converted into cash within the next

Accepted Answer

A)  year. 
B)  two years. 
C)  year or operating cycle, whichever is shorter. 
D)  year or operating cycle, whichever is longer. 
A)  year. 
B)  two years. 
C)  year or operating cycle, whichever is shorter. 
D)  year or operating cycle, whichever is longer.

Question 6

Ingles Company had the following transactions pertaining to debt securities held as an investment.   Instructions
Journalize the purchase and the receipt of interest. Assume no interest has been accrued.

Accepted Answer

The answer of Ingles Company had the following transactions pertaining...

Question 7

On January 1, 2017, Orleans industries acquired a 15% interest in Florida Corporation through the purchase of 12,000 shares of Florida Corporation common stock for $640,000. During 2017, Florida Corp. paid $160,000 in dividends and reported a net loss of $200,000. Orleans is able to exert significant influence on Florida. However, Orleans mistakenly records these transactions using the cost method rather than the equity method of accounting. Which of the following would show the correct presentation for Orlean's investment using the equity method?

Accepted Answer

The answer of On January 1, 2017, Orleans industries acquired...

Question 8

Consolidated financial statements are appropriate when an investor controls an investee by ownership of more than 50% of the investee's common stock.

Accepted Answer

A) True 
 B)False

Question 9

Ashland Corporation sells 150 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $30 a share. Ashland sold the shares for $38 a share. The entry to record the sale is

Accepted Answer

The answer of Ashland Corporation sells 150 shares of common...

Question 10

Cupcake Company had the following transactions pertaining to its temporary stock investments.
Jan. 1 Purchased 600 shares of La Crema Company stock for $7,050 cash .
June 1 Received cash dividends of $0.40 per share on the La Crema Company stock.
Sept. 15 Sold 300 shares of the La Crema Company stock for $3,400 cash.
Instructions
Journalize the transactions.

Accepted Answer

The answer of Cupcake Company had the following transactions pertaining...

Question 11

Consolidated financial statements are prepared in place of the financial statements for the parent and subsidiary companies.

Accepted Answer

A) True 
 B)False

All of the following factors would be signs of an investor's significant influence over an investee except

At the end of the first year of operations, the total cost of the trading securities portfolio is $179,000 and the total fair value is $174,000. What should the financial statements show?

Which of the following is not a method of accounting for stock investments?

Short-term investments are securities that are readily marketable and intended to be converted into cash within the next

Ingles Company had the following transactions pertaining to debt securities held as an investment. Instructions Journalize the purchase and the receipt of interest. Assume no interest has been accrued.

Consolidated financial statements are appropriate when an investor controls an investee by ownership of more than 50% of the investee's common stock.

Ashland Corporation sells 150 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $30 a share. Ashland sold the shares for $38 a share. The entry to record the sale is

Consolidated financial statements are prepared in place of the financial statements for the parent and subsidiary companies.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 15: Specimen Financial Statements: Pepsico, Inc

All of the following factors would be signs of an investor's significant influence over an investee except

At the end of the first year of operations, the total cost of the trading securities portfolio is $179,000 and the total fair value is $174,000. What should the financial statements show?

Which of the following is not a method of accounting for stock investments?

Short-term investments are securities that are readily marketable and intended to be converted into cash within the next

Ingles Company had the following transactions pertaining to debt securities held as an investment. Instructions Journalize the purchase and the receipt of interest. Assume no interest has been accrued.

Consolidated financial statements are appropriate when an investor controls an investee by ownership of more than 50% of the investee's common stock.

Ashland Corporation sells 150 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $30 a share. Ashland sold the shares for $38 a share. The entry to record the sale is

Consolidated financial statements are prepared in place of the financial statements for the parent and subsidiary companies.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters