Exam 16: Investments

On January 1, 2010, Daley Corporation purchased 30% of the common stock outstanding of King Corporation for $600,000. During 2010, King Corporation reported net income of $200,000 and paid cash dividends of $100,000. The balance of the Stock Investments-King account on the books of Daley Corporation at December 31, 2010 is

(Multiple Choice)

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Question 101

A reason some companies purchase investments is because they generate a significant portion of their earnings from investment income.

(True/False)

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Question 102

Reporting investments at fair value is

(Multiple Choice)

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Question 103

Short-term stock investments should be valued on the balance sheet at

(Multiple Choice)

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Question 104

Stein Company had the following transactions pertaining to its short-term stock investments. Jan. 1 Purchased 600 shares of Pine Company stock for $7,000 cash plus brokerage fees of $350. June 1 Received cash dividends of $0.60 per share on the Pine Company stock. Sept. 15 Sold 300 shares of the Pine Company stock for $3,600 less brokerage fees of $200. Instructions Journalize the transactions.

(Essay)

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Question 105

If an investor owns less than 20% of the common stock of another corporation as a long-term investment,

(Multiple Choice)

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Question 106

The balance in the Unrealized Loss-Equity account will

(Multiple Choice)

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Question 107

At December 31, 2010, Gregson Inc. has these data on its security investments: If the available-for-sale securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value?

(Short Answer)

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Question 108

At January 1, 2010, the available-for-sale securities portfolio held by Howe Corporation consisted of the following investments: 1. 2,500 shares of Nyland common stock purchased for $42 per share. 2. 1,500 shares of Gregg common stock purchased for $60 per share. At December 31, 2010, the market values per share were Nyland $36 and Nyland $68. Instructions (a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2010. (b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2010.

(Essay)

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Question 109

_______________ securities are bought and held primarily for sale in the near future.

(Short Answer)

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Question 110

At December 31, 2010, the available-for-sale securities for Milner, Inc. are as follows. Instructions (a) Prepare the adjusting entry at December 31, 2010, to report the securities at fair value. (b) Show the balance sheet and income statement presentation at December 31, 2010, after adjustment to fair value. The securities are considered to be a long-term investment.

(Essay)

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Question 111

Corporations invest excess cash for short periods of time in each of the following except

(Multiple Choice)

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Question 112

When bonds are sold, the gain or loss on sale is the difference between the

(Multiple Choice)

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Question 113

An unrealized gain or loss on trading securities is reported as a separate component of stockholders' equity.

(True/False)

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Question 114

Greene Corporation sells 300 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Greene sold the shares for $40 a share. The entry to record the sale is

(Multiple Choice)

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Question 115

On January 1 Jett Corporation purchased a 35% equity in Dexter Corporation for $220,000. At December 31 Dexter declared and paid a $60,000 cash dividend and reported net income of $200,000. Instructions (a) Journalize the transactions. (b) Determine the amount to be reported as an investment in Dexter stock at December 31.

(Essay)

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Question 116

At January 1, 2010, Gulfport Corporation held one available-for-sale security: 1,500 shares of Netblaster common stock purchased for $40 per share. At December 31, 2010, the market value per share for Netblaster was $42. Prepare the adjusting entry to report the portfolio at fair value at December 31, 2010.

(Essay)

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Question 117

On April 25, Donnoly Company buys 4,200 shares of Carpenter common stock for $92,500, plus brokerage fees of $2,000. On October 31, Donnoly sells 600 shares of Corpenter stock for $15,500, less brokerage fees of $500. Prepare journal entries for the purchase and sale of the Carpenter common stock.

(Essay)

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Question 118

At December 31, 2010, the trading securities for Carter Company are as follows: Instructions Prepare the adjusting entry at December 31, 2010, to report the securities at fair value.

(Essay)

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Question 119

Under the cost method, dividends received from an investee company are credited to the _ account, whereas under the equity method, dividends received from an investee company are credited to the _ account.

(Short Answer)

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Question 120

Showing 101 - 120 of 178

A reason some companies purchase investments is because they generate a significant portion of their earnings from investment income.

Reporting investments at fair value is

Short-term stock investments should be valued on the balance sheet at

If an investor owns less than 20% of the common stock of another corporation as a long-term investment,

The balance in the Unrealized Loss-Equity account will

At December 31, 2010, Gregson Inc. has these data on its security investments: If the available-for-sale securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value?

_______________ securities are bought and held primarily for sale in the near future.

Corporations invest excess cash for short periods of time in each of the following except

When bonds are sold, the gain or loss on sale is the difference between the

An unrealized gain or loss on trading securities is reported as a separate component of stockholders' equity.

Greene Corporation sells 300 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Greene sold the shares for $40 a share. The entry to record the sale is

On April 25, Donnoly Company buys 4,200 shares of Carpenter common stock for $92,500, plus brokerage fees of $2,000. On October 31, Donnoly sells 600 shares of Corpenter stock for $15,500, less brokerage fees of $500. Prepare journal entries for the purchase and sale of the Carpenter common stock.

At December 31, 2010, the trading securities for Carter Company are as follows: Instructions Prepare the adjusting entry at December 31, 2010, to report the securities at fair value.

Under the cost method, dividends received from an investee company are credited to the _ account, whereas under the equity method, dividends received from an investee company are credited to the _ account.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

Exam 16: Investments

A reason some companies purchase investments is because they generate a significant portion of their earnings from investment income.

Reporting investments at fair value is

Short-term stock investments should be valued on the balance sheet at

If an investor owns less than 20% of the common stock of another corporation as a long-term investment,

The balance in the Unrealized Loss-Equity account will

At December 31, 2010, Gregson Inc. has these data on its security investments: If the available-for-sale securities are held as long-term investments, which of the following will be recorded to adjust the securities to fair value?

_______________ securities are bought and held primarily for sale in the near future.

Corporations invest excess cash for short periods of time in each of the following except

When bonds are sold, the gain or loss on sale is the difference between the

An unrealized gain or loss on trading securities is reported as a separate component of stockholders' equity.

Greene Corporation sells 300 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Greene sold the shares for $40 a share. The entry to record the sale is

On April 25, Donnoly Company buys 4,200 shares of Carpenter common stock for $92,500, plus brokerage fees of $2,000. On October 31, Donnoly sells 600 shares of Corpenter stock for $15,500, less brokerage fees of $500. Prepare journal entries for the purchase and sale of the Carpenter common stock.

At December 31, 2010, the trading securities for Carter Company are as follows: Instructions Prepare the adjusting entry at December 31, 2010, to report the securities at fair value.

Under the cost method, dividends received from an investee company are credited to the _______________ account, whereas under the equity method, dividends received from an investee company are credited to the _______________ account.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

Under the cost method, dividends received from an investee company are credited to the _ account, whereas under the equity method, dividends received from an investee company are credited to the _ account.