Question 1

Rhone Importers purchases automotive parts from Germany.Prepare journal entries for the following transactions of Rhone.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 2

Brown Company sold supplies in the amount of 15,000 euros to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Brown must record a loss of $450.

Accepted Answer

A) True 
 B)False

Question 3

A decrease in the fair market value of a security that has not yet been realized through an actual sale of the security is called a(n):

Accepted Answer

A) Contingent loss 
B) Realizable loss 
C) Unrealized loss 
D) Capitalized loss 
E) Market loss 
A) Contingent loss 
B) Realizable loss 
C) Unrealized loss 
D) Capitalized loss 
E) Market loss

Question 4

Morgan Company purchased 2,000 shares of Asta's common stock for $143,000 as a long-term investment and is considered available-for-sale.The par value of the stock was $1 per share.Morgan paid $375 in commissions on the transaction.The entry to record the transaction would include a:

Accepted Answer

A) Credit to Common Stock for $2,000. 
B) Credit to Common Stock for $143,000. 
C) Credit to Common Stock for $143,375. 
D) Debit to Long-Term Investments for $143,000. 
E) Debit to Long-Term Investments for $143,375. 
A) Credit to Common Stock for $2,000. 
B) Credit to Common Stock for $143,000. 
C) Credit to Common Stock for $143,375. 
D) Debit to Long-Term Investments for $143,000. 
E) Debit to Long-Term Investments for $143,375.

Question 5

On January 1,2014,Brig Corp.paid $39,200 plus a brokerage fee in the amount of $800 to buy Sonny's 8%,two-year bonds payable with a $40,000 par value.The bonds pay interest semiannually on June 30 and December 31.Brig intends to hold the bonds until they mature on December 31,2016.How would the company record the purchase of the bonds?

Accepted Answer

A) Debit Long-Term Investments-HTM (Sonny) for $39,200 and credit Cash for $39,200. 
B) Debit Short -Term Investments-HTM (Sonny) for $40,000 and credit Cash for $40,000. 
C) Debit Long -Term Investments-HTM (Sonny) for $40,000 and credit Cash for $40,000. 
D) Debit Long-Term Investments-HTM (Sonny) for $39,200,debit Brokerage Fee Expense for $800,and credit Cash for $40,000. 
E) Debit Long-Term Investments-HTM (Sonny) for $39,200,debit Unrealized Loss-Income for $800,and credit Cash for $40,000. 
A) Debit Long-Term Investments-HTM (Sonny) for $39,200 and credit Cash for $39,200. 
B) Debit Short -Term Investments-HTM (Sonny) for $40,000 and credit Cash for $40,000. 
C) Debit Long -Term Investments-HTM (Sonny) for $40,000 and credit Cash for $40,000. 
D) Debit Long-Term Investments-HTM (Sonny) for $39,200,debit Brokerage Fee Expense for $800,and credit Cash for $40,000. 
E) Debit Long-Term Investments-HTM (Sonny) for $39,200,debit Unrealized Loss-Income for $800,and credit Cash for $40,000.

Question 6

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.

Accepted Answer

a.2012: $450,000/$2,500,000 =

Question 7

As a long-term investment,Elmer's Equipment Enterprise purchased 35% of Sticky Supplies Inc.'s 300,000 shares for $350,000 at the beginning of the fiscal year of both companies.On the purchase date,the fair value and book value of Sticky's net assets were equal.During the year,Sticky's earned net income of $430,000 and distributed cash dividends of 0.42 cents per share.The fair value of Sticky's assets at the end of the year totaled $349,450.What is Elmer's balance for this investment at the end of the year?

Accepted Answer

The answer of As a long-term investment,Elmer's Equipment Enterprise purchased...

Question 8

A company owns $100,000 of 9% bonds that pay interest on October 1 and April 1.The amount of interest accrued on December 31 (the company's year-end) would be:

Accepted Answer

A) $750 
B) $1,500 
C) $2,250 
D) $4,500 
E) $9,000 
A) $750 
B) $1,500 
C) $2,250 
D) $4,500 
E) $9,000

Question 9

Chung owns 40% of Lu's common stock.Lu pays $97,000 in total cash dividends to its shareholders.Chung's entry to record this transaction should include a:

Accepted Answer

A) Debit to Dividends for $97,000. 
B) Debit to Dividends for $38,800. 
C) Debit to Long-Term investments for $97,000. 
D) Credit to Long-Term Investments for $38,800. 
E) Credit to Cash for $97,000. 
A) Debit to Dividends for $97,000. 
B) Debit to Dividends for $38,800. 
C) Debit to Long-Term investments for $97,000. 
D) Credit to Long-Term Investments for $38,800. 
E) Credit to Cash for $97,000.

Question 10

What is comprehensive income and how is it usually reported in the financial statements?

Accepted Answer

Comprehensive income refers to all chang

Question 11

As a long-term investment,Elmer's Equipment Enterprise purchased 35% of Sticky Supplies Inc.'s 300,000 shares for $350,000 at the beginning of the fiscal year of both companies.On the purchase date,the fair value and book value of Sticky's net assets were equal.During the year,Sticky's earned net income of $430,000 and distributed cash dividends of 0.42 cents per share.The fair value of Sticky's assets at the end of the year totaled $349,450.What is the journal entry,if any to record the net income for the investment in Sticky?

Accepted Answer

Investment in Sticky

Question 12

Investments in trading securities:

Accepted Answer

A) Include only equity securities. 
B) Are reported as current assets. 
C) Include only debt securities. 
D) Are reported at their cost,no matter what their market value. 
E) Are long-term investments. 
A) Include only equity securities. 
B) Are reported as current assets. 
C) Include only debt securities. 
D) Are reported at their cost,no matter what their market value. 
E) Are long-term investments.

Question 13

Long-term investments in held-to-maturity debt securities are accounted for using the:

Accepted Answer

A) Market value method with market adjustment to income. 
B) Market value method with market adjustment to equity. 
C) Cost method with amortization. 
D) Cost method without amortization. 
E) Equity method. 
A) Market value method with market adjustment to income. 
B) Market value method with market adjustment to equity. 
C) Cost method with amortization. 
D) Cost method without amortization. 
E) Equity method.

Question 14

On November 12,Kera,Inc.,a U.S.company,sold merchandise on credit to Kakura Company of Japan at a price of 1,500,000 yen.The exchange rate was $0.00837 on the date of sale.On December 31,when Kera prepared its financial statements,the exchange rate was $0.00843.Kakura Company paid in full on January 12,when the exchange rate was $0.00861. On January 12,Kera should prepare the following journal entry for this transaction:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 15

Explain the difference between short-term and long-term investments and give examples of each.

Accepted Answer

Short-term investments are securities ex

Question 16

The cost method of accounting is used for long-term investments in equity securities with significant influence.

Accepted Answer

A) True 
 B)False

Question 17

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:

Accepted Answer

A) Credit to Long-Term Investments for $16,450. 
B) Debit to Long-Term Investments for $16,450. 
C) Debit to Cash for $47,000. 
D) Credit to Cash for $16,450. 
E) Credit to Investment Revenue for $47,000. 
A) Credit to Long-Term Investments for $16,450. 
B) Debit to Long-Term Investments for $16,450. 
C) Debit to Cash for $47,000. 
D) Credit to Cash for $16,450. 
E) Credit to Investment Revenue for $47,000.

Question 18

Long-term investments can include funds set aside for special purposes such as bond sinking funds.

Accepted Answer

A) True 
 B)False

Question 19

A company paid $47,500 plus a broker's fee of $400 to acquire 8% bonds with a $60,000 maturity value.The company intends to hold the bonds to maturity.The cash proceeds the company will receive upon maturity of the bonds is:

Accepted Answer

A) $60,000 
B) $60,400 
C) $47,900 
D) $64,800 
E) $52,300 
A) $60,000 
B) $60,400 
C) $47,900 
D) $64,800 
E) $52,300

Question 20

Investments in equity securities where the investor has a significant,but not controlling,influence are accounted for using the _______________ method.

Accepted Answer

The answer of Investments in equity securities where the investor...

Rhone Importers purchases automotive parts from Germany.Prepare journal entries for the following transactions of Rhone.

Brown Company sold supplies in the amount of 15,000 euros to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Brown must record a loss of $450.

A decrease in the fair market value of a security that has not yet been realized through an actual sale of the security is called a(n):

Morgan Company purchased 2,000 shares of Asta's common stock for $143,000 as a long-term investment and is considered available-for-sale.The par value of the stock was $1 per share.Morgan paid $375 in commissions on the transaction.The entry to record the transaction would include a:

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.

A company owns $100,000 of 9% bonds that pay interest on October 1 and April 1.The amount of interest accrued on December 31 (the company's year-end) would be:

Chung owns 40% of Lu's common stock.Lu pays $97,000 in total cash dividends to its shareholders.Chung's entry to record this transaction should include a:

What is comprehensive income and how is it usually reported in the financial statements?

Investments in trading securities:

Long-term investments in held-to-maturity debt securities are accounted for using the:

Explain the difference between short-term and long-term investments and give examples of each.

The cost method of accounting is used for long-term investments in equity securities with significant influence.

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:

Long-term investments can include funds set aside for special purposes such as bond sinking funds.

A company paid $47,500 plus a broker's fee of $400 to acquire 8% bonds with a $60,000 maturity value.The company intends to hold the bonds to maturity.The cash proceeds the company will receive upon maturity of the bonds is:

Investments in equity securities where the investor has a significant,but not controlling,influence are accounted for using the _______________ method.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 15: Investments and International Operations

Rhone Importers purchases automotive parts from Germany.Prepare journal entries for the following transactions of Rhone.

Brown Company sold supplies in the amount of 15,000 euros to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Brown must record a loss of $450.

A decrease in the fair market value of a security that has not yet been realized through an actual sale of the security is called a(n):

Morgan Company purchased 2,000 shares of Asta's common stock for $143,000 as a long-term investment and is considered available-for-sale.The par value of the stock was $1 per share.Morgan paid $375 in commissions on the transaction.The entry to record the transaction would include a:

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.

A company owns $100,000 of 9% bonds that pay interest on October 1 and April 1.The amount of interest accrued on December 31 (the company's year-end) would be:

Chung owns 40% of Lu's common stock.Lu pays $97,000 in total cash dividends to its shareholders.Chung's entry to record this transaction should include a:

What is comprehensive income and how is it usually reported in the financial statements?

Investments in trading securities:

Long-term investments in held-to-maturity debt securities are accounted for using the:

Explain the difference between short-term and long-term investments and give examples of each.

The cost method of accounting is used for long-term investments in equity securities with significant influence.

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:

Long-term investments can include funds set aside for special purposes such as bond sinking funds.

A company paid $47,500 plus a broker's fee of $400 to acquire 8% bonds with a $60,000 maturity value.The company intends to hold the bonds to maturity.The cash proceeds the company will receive upon maturity of the bonds is:

Investments in equity securities where the investor has a significant,but not controlling,influence are accounted for using the _______________ method.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Accounting for Partnerships

Accounting With Special Journals

Filters