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The investment category for which the investor's "...

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The investment category for which the investor's "positive intent and ability to hold" is important is: A. Securities reported under the equity method. B. Trading securities. C. Securities classified as held to maturity. D. Securities available for sale. 2. Which category completely excludes equity securities? A. Securities available for sale. B. Consolidating securities. C. Held-to-maturity securities. D. Trading securities. 3. In 2009, Osgood Corporation purchased $4 million in ten-year municipal bonds at face value. On December 31, 2011, the bonds had a market value of $3,600,000 and Osgood reclassified the bonds from held to maturity to trading securities. Osgood's December 31, 2011, balance sheet and the 2011 income statement would show the following: A. Option A B. Option B C. Option C D. Option D 4. Securities that are purchased with the intent of selling them in the near future to take advantage of short-term price changes are classified as: A. Securities available for sale. B. Consolidating securities. C. Held-to-maturity securities. D. Trading securities. 5. The income statement reports changes in fair value for which type of securities? A. Securities reported under the equity method. B. Trading securities. C. Held-to-maturity securities. D. Securities available for sale. 6. On January 1, 2011, Nana Company paid $100,000 for 8,000 shares of Papa Company common stock. These securities were classified as trading securities. The ownership in Papa Company is 10%. Papa reported net income of $52,000 for the year ended December 31, 2011. The fair value of the Papa stock on that date was $45 per share. What amount will be reported in the balance sheet of Nana Company for the investment in Papa at December 31, 2011? A. $284,400. B. $300,000. C. $315,600. D. $360,000. 7. Goofy Inc. bought 15,000 shares of Crazy Co.'s stock for $150,000 on May 5, 2010, and classified the stock as available for sale. The market value of the stock declined to $118,000 by December 31, 2010. Goofy reclassified this investment as trading securities in December of 2011 when the market value had risen to $125,000. What effect on 2011 income should be reported by Goofy for the Crazy Co. shares? A. $0. B. $25,000 net loss. C. $7,000 net gain. D. $32,000 net loss. 8. All investments in debt and equity securities that don't fit the definitions of the other reporting categories are classified as: A. Trading securities. B. Securities available for sale. C. Held-to-maturity securities. D. Consolidated securities. 9. When an equity security is appropriately carried and reported as securities available for sale, a gain should be reported in the income statement: A. When the fair value of the security increases. B. When the present value of the security increases. C. Only when the Dow Jones Industrial Average increases at least 100 points. D. Only when the security is sold. 10. Unrealized holding gains and losses on securities available for sale would have the following effects on accumulated other comprehensive income: A. Option A B. Option B C. Option C D. Option D 11. Unrealized holding gains and losses on securities available for sale would have the following effects on retained earnings: A. Option a B. Option b C. Option c D. Option d 12. On January 2, 2010, Howdy Doody Corporation purchased 12% of Ranger Corporation's common stock for $50,000 and classified the investment as available for sale. Ranger's net income for the years ended December 31, 2010 and 2011, were $10,000 and $50,000, respectively. During 2011, Ranger declared and paid a dividend of $60,000. There were no dividends in 2010. On December 31, 2010, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. How much should Howdy Doody show in the 2011 income statement as income from this investment? A. $26,000. B. $7,200. C. $20,000. D. $27,200. 13. If an available-for-sale investment is sold for which there are unrealized gains in accumulated other comprehensive income (AOCI), a reclassification adjustment affects other comprehensive income (OCI) in the period of sale by A. reducing OCI for the amount of unrealized gains in AOCI. B. increasing OCI for the amount of unrealized gains in AOCI. C. no effect on OCI, as OCI only includes the effects of unrealized gains and losses. D. no effect on OCI, as the realized gain is included in AOCI. 14. Seybert Systems accounts for its investment in Wang Engineering as available for sale. Seybert's balance in accumulated other comprehensive income with respect to the Wang investment is a credit balance of $20,000, and Seybert lists the investment at $100,000 on its balance sheet. Seybert purchased the Wang investment for (ignore taxes): A. $100,000. B. $120,000. C. $80,000. D. cannot be determined from this information. 15. When the equity method of accounting for investments is used by the investor, the investment account is increased when: A. A cash dividend is received from the investee. B. The investee reports a net income for the year. C. The investor records additional depreciation related to the investment. D. The investee reports a net loss for the year. 16. Which of the following increases the investment account under the equity method of accounting? A. Decreasing the market price of the investee's stock B. Dividends paid by the investee that were declared in the previous year C. Net loss of the investee company D. None of the above is correct. 17. If the fair value of equity securities is not determinable and the equity method is not appropriate, the securities should be reported at: A. Amortized cost. B. Cost. C. Consolidated value. D. Net present value. 18. On July 1, 2011, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid $3,000,000 for the investment, and that amount is exactly equal to 40% of the fair value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,000,000 for 2011, and paid $150,000 quarterly dividends to its shareholders. After all closing entries are made, Tremen's "Investment in Delany Company" account would have a balance of: A. $3,200,000. B. $3,160,000. C. $3,000,000. D. $3,080,000. 19. Jack Corporation purchased a 20% interest in Jill Corporation for $1,500,000 on January 1, 2011. Jack can significantly influence Jill. On December 10, 2011, Jill declared and paid $1 million in dividends. Jill reported a net loss of $6 million for the year. What amount of loss should Jack report in its income statement for 2011 relative to its investment in Jill? A. $1 000,000. B. $1,200,000. C. $1,400,000. D. $1,500,000. 20. Sox Corporation purchased a 40% interest in Hack Corporation for $1,500,000 on Jan 1, 2011. On November 1, 2011, Hack declared and paid $1 million in dividends. On December 31, Hack reported a net loss of $6 million for the year. What amount of loss should Sox report on its income statement for 2011 relative to its investment in Hack? A. $1,100,000. B. $2,400,000. C. $1,500,000. D. $1,600,000.,Pleaseee Help me with my homework,Thanks a lot!!,Where is going to be ready,,,, Do u know?,Sorry, I mean,,, Whennn

 

Paper#7673 | Written in 18-Jul-2015

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