Exam 15: Investments and International Operations

Parris Corporation purchased 40% of Samitz Corporation for $100,000 on January 1. On November 17 of the same year, Samitz Corporation declared total cash dividends of $12,000. At year-end, Samitz Corporation reported net income of $60,000. The balance in the Parris Corporation's Long-Term Investment-Samitz account at December 31 should be:

Hamilton Company owns 51,000 of Hennie Company's 100,000 outstanding shares of common stock. Hennie Company pays $25,000 in total cash dividends to its shareholders. Hamilton's entry to record this transaction should include a:

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

Vans purchased 40,000 shares of Skechs common stock for $232,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:

Explain how to record the sale of trading securities.

A controlling investor is called the parent, and the investee company is called the subsidiary.

Debt securities:

The controlling investor is called the:

Short-term investments in held-to-maturity debt securities are accounted for using the __________________________.

Mian sells American gourmet foods to merchandisers in Singapore. Prepare the journal entries for Mian to record the following transactions. Include any year-end adjustments.

Held-to-maturity securities are equity securities a company intends and is able to hold until maturity.

Debt securities are recorded at cost when purchased, and interest revenue for investments in debt securities is recorded when earned.

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:

____________________________ are debt and equity securities that a company intends to actively manage and trade for a profit.

Explain how available-for-sale debt and equity securities are accounted for at and after acquisition and how they are reported in financial statements.

On May 15, Briar Company purchased 10,000 shares of Broder Corp. for $80,000. The securities are considered available-for-sale securities. On September 30, the stock had a market value of $85,000. The $5,000 difference must be reported on the income statement as a $5,000 gain.

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

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

A U. S. Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Morgan Company purchased 2,000 shares of Asta's common stock for $143,000 as a long-term investment. The investment is classified as available-for-sale securities. 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: