Exam 14: Investments and International Operations

A U.S.company makes a sale to a foreign customer payable in 30 days in the customer's currency.The sale would be recorded by the U.S.company on the date:

Hector Corp.purchased 1,000 shares of Landmark Corp.'s common stock for $36,850 cash.This purchase is considered a long-term available-for-sale investment by Hector.Prepare Hector's journal entry to record the purchase.

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

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%.

Equity securities reflect a creditor relationship such as investments in notes,bonds and certificates of deposit.

A company received dividends of $0.35 per share on 300 shares of stock.The journal entry to record this transaction would be to debit Cash for $105 and credit Dividend Revenue for $105.

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

A company had net income of $40,000,net sales of $300,000 and average total assets of $200,000.Its profit margin and total asset turnover were respectively:

What are the accounting basics for equity securities,including acquisition,dividends earned and disposition?

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 is computed by dividing ___________ by __________.

When using the equity method,receipt of cash dividends increases the carrying value of an investment in equity securities.

An investor purchased $50,000 of bonds that were held to maturity.The investor's journal entry at maturity of the bonds should include a debit to Cash for $50,000 and a credit to Long-Term Investments for $50,000.

_________________________ are investments that are both readily converted to known amounts of cash and mature within 3 months.

Six months ago,a company purchased an investment in stock for $65,000.This investment is considered available-for-sale.The current market value of the stock is $68,500.The company should record a:

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

Investments in debt and equity securities that the company actively manages and trades for profit are referred to as short-term investments in:

When using the equity method of accounting for investments in equity securities,the receipt of cash dividends is recorded as revenue.

Any unrealized gain or loss on available-for-sale securities is reported on the income statement in the other gain or loss section.

Equity securities are: