Exam 8: Long-Term Investments the Time Value of Money

The market value of an available-for-sale security has decreased from the last carrying value. The journal entry to record this decrease will include:

Sales of available-for-sale investments are reported as investing activities on the Consolidated Statement of Cash Flows.

A consolidated income statement will show:

On the statement of cash flows, the cash received from selling available-for-sale investments is shown as a(n):

On January 1, 2012, Gardner Corporation purchased 25% of the common stock outstanding of Lance Coporation for $250,000. During 2012, Lance Corporation reported net income of $80,000 and paid cash dividends of $40,000. The balance of the Long-Term Investment account at December 31, 2012 is:

When an investor owns 35% of the stock of another business, cash dividends received from the investee company are generally recorded by increasing the value of the Investment account.

The purchase of a held-to-maturity investment would appear on a statement of cash flows as a

The sale of a held-to-maturity investments are shown on the statement of cash flows as:

The gain or loss on the sale of an investment classified as "available-for-sale" is calculated by comparing the cost of the investment with the:

The company whose more than 50% of the stock is owned by a parent company is called the:

The balance in the Unrealized Gains and Losses on Available-for-sale Securities account appear in which financial statement?

Present value is based on:

Ace Company purchased 1,000 shares of Nott Company at $40 per share. Ace received an additional 250 shares from Nott Company as a stock dividend. After receiving the stock dividend, the total value of the investment in Nott and cost per share of Nott, respectively is:

The Allowance to Adjust Investment to Market has a debit balance. Therefore:

If $125,000 face value bonds are issued at 103, the bond is selling for $103,000.

Available-for-sale investments in stock are reported on the balance sheet at cost.

The accounting rules for investments in stock have no bearing on the percentage of ownership by the investor

The investment account is debited at acquisition under both the equity method and the available-for-sale method of accounting for investments in common stock.

A gain or loss on the sale of a long-term investment using the equity method is calculated by taking the difference between cash received and:

All investments not classified as available-for-sale investments or trading securities are: