Exam 14: Time Value of Money

All of the following are necessary to compute the future value of a single amount except the

The amount you must deposit now in your savings account paying 5% interest, in order to accumulate $18,000 for your first tuition payment when you start law school in 3 years is

The purchase of a company that is in the same industry, but involved in a different activity, is called a vertical acquisition.

Distinguish between the cost and equity methods of accounting for investments in stocks.

The present value of a long-term note is based on the payment amounts, the length of time until the amounts are paid, and the discount rate.

The ability of an investing company to affect the operating and financial activities of another company, even though the investor holds less than 50% of the stock, is known as

Debt investments are investments in government and corporation bonds.

Charleston Co. purchased 60, 6% APS Company bonds for $60,000 cash. Interest is payable semiannually on July 1 and January 1. The entry to record the July 1 semiannual interest payment would include a

PWAT Inc. had these transactions pertaining to investments in common stock: Jan 1 Purchased 2,000 shares of Pasco Corporation common stock (5% of outstanding shares) for $96,500 cash. July 1 Received a cash dividend of $1.70 per share. Dec. 1 Sold 800 shares of Pasco Corporation common stock for $40,200. 31 Received a cash dividend of $1.70 per share. Instructions Journalize the transactions.

Assume that Os

Mazzeo Company acquires 80 Dodd's 10%, 5 year, $1,000 bonds on January 1, 2014 for $80,000. If Mazzeo sells all of its Dodd's Bonds for $78,400 what gain or loss is recognized?

When a company holds stock of several different corporations, the group of securities is identified as a(n)

Which of the following accounting problems does not involve a present value calculation?

The future value of an annuity factor for 2 periods is equal to

Consolidated financial statements should be prepared only when a subsidiary company has a controlling interest in the parent company.

Cantor Corporation's balance sheet at December 31, 2013, showed the following: Short-term investments, at fair value $46,500 Cantor Corporation's trading portfolio of stock investments consisted of the following at December 31, 2013: During 2014, the following transactions took place: Feb. 5 Sold 50 shares of Interstate common stock for $7,900. Mar. 30 Purchased 25 shares of Georgia common stock for $850. Sept. 9 Purchased 50 shares of Georgia common stock for $2,000. At year end on December 31, 2014, the fair values per share were: Instructions (a) Prepare the journal entries to record the 2014 stock transactions. (b) On December 31, 2014, prepare any adjusting entry that might be necessary relative to the trading portfolio. (c) Show how the stock investments will appear on Cantor Corporation's balance sheet at December 31, 2014.

Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company

When investing excess cash for short periods of time, corporations invest in debt securities and stock securities.

Deutsche Corporation's trading portfolio at the end of the year is as follows: The year-end adjusting entry to reflect a decrease in the value of stock trading securities includes a

On January 1, Bay View Company purchased as an investment a $1,000, 6% bond for $1,000. The bond pays interest on January 1 and July 1. The bond is sold on September 1 for $1,050 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold?