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Which of the following would be considered an ?Other Comprehensive Income? item.....

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Question;1.;Which of the following would be considered an ?Other Comprehensive;Income? item?;a.;net;income.;b.;extraordinary;loss related to flood.;c.;gain on;disposal of discontinued operations.;d.;unrealized;loss on available-for-sale securities.;2. Which of the following is not a part of;comprehensive income?;a.;foreign;currency items;b.;restructuring;charges;c.;unrealized;gains and losses;d.;pension;liability adjustments;3. Companies may report comprehensive income on each of the;statements below except;a.;income;statement;b.;separate;statement of comprehensive income;c.;statement;of stockholders? equity;d.;retained;earnings statement;4. An investor purchased 500 shares of common stock, $25;par, for $21,750. Subsequently, 100 shares were sold for $49.50 per share. What is the amount of gain or loss on the;sale?;a.;$12,750;gain;b.;$600 gain;c.;$600 loss;d.;$9,250;loss;5. During the current year, the Yankton Company purchased;200 shares of in the Sorros Company for $13,000 as a temporary investment;(trading security). At the end of the year, the market value of the stock was;$11,000. The Yankton Company's financial;statements for the current year should show;a.;a loss of;$2,000 on the income statement and a net trading investments (at fair value);of $13,000 on the balance sheet;b.;no loss;on the income statement and a net trading investments (at fair value)s of;$13,000 on the balance sheet;c.;a gain of;$2,000 on the income statement and a net trading investments (at fair value);of $11,000 on the balance sheet;d.;a loss of;$2,000 on the income statement and a net trading investments (at fair value);of $11,000 on the balance sheet;6. The account Unrealized Loss on Available-for-Sale;Investments in Stock should be included in the;a.;Income;statement;b.;Balance;sheet as an addition to Temporary Investments in Stock;c.;Balance;sheet as a deduction in Stockholders' Equity;d.;Statement;of Retained Earnings;7. The equity method of accounting for investments;a.;requires;a year-end adjustment to revalue the stock to lower of cost or market;b.;requires;the investment to be reported at its original cost;c.;requires;the investment be increased by the reported net income of the investee;d.;requires;the investment be decreased by the reported net income of the investee;8. Armando Company owns 15,000 of the 50,000 shares of;common stock outstanding of Tito Company and exercises a significant influence;over its operating and financial policies.;The investment should be accounted for by the;a.;equity;method;b.;market;method;c.;cost or;market method;d.;cost;method;9. Under the equity method, the receipt of cash dividends on;an investment in common stock of Vallerio Corporation is accounted for as a;debit to Cash and a credit to;a.;Investment;in Vallerio;b.;Retained;Earnings;c.;Dividend;Revenue;d.;Dividend;Receivables;10. Long-term investments are held for all of the listed;reasons below except;a.;their;income;b.;long-term;gain potential;c.;influence;over another business entity;d.;meet;current cash needs;11. When shares of stock held as an investment are sold, the;difference between the proceeds and the carrying amount of the investment is;recorded as a(n);a.;prior;period adjustment;b.;extraordinary;gain or loss;c.;paid-in;capital addition;d.;gain or;loss;12. Investments such as Trading Securities;Available-for-sale securities are;a.;recorded;at cost but reported at fair market value;b.;recorded;at cost and reported at cost;c.;recorded;at cost but reported at lower of cost or fair market value;d.;recorded;at fair market value and reported at fair market value;13. Blanton Corporation purchased 17% of the outstanding shares;of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net;income and declared and paid cash dividends.;What journal entry would Blanton Corporation use to record the purchase;of Worton Corporation common stock?;a.;debit;Investment in Worton Corporation, credit Cash;b.;debit;Cash, credit Dividend Revenue;c.;debit;Investment in Worton Corporation, credit Income of Worton Corporation;d.;debit;Cash, credit Investment in Worton Corporation;14. Blanton Corporation purchased 17% of the outstanding shares;of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net;income and declared and paid cash dividends.;What journal entry would Blanton Corporation use to record dividends;from Worton Corporation?;a.;debit;Investment in Worton Corporation, credit Cash;b.;debit;Cash, credit Dividend Revenue;c.;debit;Investment in Worton Corporation, credit Income of Worton Corporation;d.;debit;Cash, credit Investment in Worton Corporation;15. Blanton Corporation purchased 35% of the outstanding shares;of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net;income and declared and paid cash dividends.;What journal entry would Blanton Corporation use to record its share of;the earnings of Worton Corporation?;a.;debit;Investment in Worton Corporation Stock, credit Cash;b.;debit;Cash, credit Dividend Revenue;c.;debit;Investment in Worton Corporation, credit Income of Worton Corporation;d.;debit;Cash, credit Investment in Worton Corporation;16. Parker Company owns 83% of the outstanding stock of Tadeo;Company. Parker Company is referred to;as the;a.;parent;b.;minority;interest;c.;affiliate;d.;subsidiary;17. Gale Company owns 87% of the outstanding stock of Leonardo;Company. Leonardo Company is referred to;as the;a.;parent;b.;minority;interest;c.;affiliate;d.;subsidiary;18. Financial statements in which financial data for two or;more companies are combined as a single entity are called;a.;conventional;statements;b.;consolidated;statements;c.;audited;statements;d.;constitutional;statements;19. In general, consolidated financial statements should be;prepared;a.;when a;corporation owns more than 20% of the common stock of another company;b.;when a;corporation owns more than 50% of the common stock of another company;c.;only when;a corporation owns 100% of the common stock of another company;d.;whenever;the market value of the stock investment is significantly lower than its cost;20. For accounting purposes, the method used to account for;investments in common stock is determined by;a.;the;amount paid for the stock by the investor.;b.;whether;the acquisition of the stock by the investor was "friendly" or;hostile.;c.;the;extent of an investor's influence over the operating and financial affairs of;the investee (indicated by the;share of ownership possessed).;d.;whether;the stock has paid dividends in past years.;21. The company whose stock is owned by the parent company is;called the;a.;controlled;company.;b.;investee;company.;c.;subsidiary;company.;d.;sibling;company.;22. A company that owns more than 50% of the common stock of;another company is known as the;a.;parent;company.;b.;management;company.;c.;subsidiary;company.;d.;in-charge;company.;23. All of the following are disadvantages of fair value use except;a.;fair;values may not be readily obtainable.;b.;fair;values may cause more fluctuations as change occurs from period to period.;c.;comparability;between companies may be impacted by different fair value measurement.;d.;fair;values can only be reflected in balance sheet accounts.;24. Why do companies invest in other companies?

 

Paper#51818 | Written in 18-Jul-2015

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