Question 1

If the equity method is being used, the Revenue from Investment in Stock account is

Accepted Answer

A)  just another name for a Dividend Revenue account. 
B)  credited when dividends are declared by the investee. 
C)  credited when net income is reported by the investee. 
D)  debited when dividends are declared by the investee. 
A)  just another name for a Dividend Revenue account. 
B)  credited when dividends are declared by the investee. 
C)  credited when net income is reported by the investee. 
D)  debited when dividends are declared by the investee.

Question 2

If Claude Summers invests $14,962.50 now, she will receive $50,000 at the end of 14 years. What annual rate of return will Claude earn on his investment?

Accepted Answer

Use presen

Question 3

If Jane Key invests $15,501.28 now and she will receive $40,000 at the end of 11 years, what annual rate of interest will she be earning on her investment?

Accepted Answer

A)  8% 
B)  8.5% 
C)  9% 
D)  10% 
A)  8% 
B)  8.5% 
C)  9% 
D)  10%

Question 4

Corporations purchase investments in debt or equity securities generally for one of two reasons.

Accepted Answer

A) True 
 B)False

Question 5

When investments in bonds are sold, any difference between the sales price and the fair value of the bonds is recorded as a gain or loss.

Accepted Answer

A) True 
 B)False

Question 6

Match between columns
                        Premises: Amount for which a security could be sold.
Financial statements that present the assets and liabilities controlled by the parent and the aggregate profitability of the affiliated companies.
Purchase of a company in the same industry but involved in a different activity.
Investments that are not readily marketable.
Valuation allowance account.
An account that is reported in the stockholders' equity section.
Entity whose stock is owned by the parent company.
Securities that may be sold in the future.
Ownership of more than 50% of another company's common stock.
The Stock Investments account is adjusted for net income and dividends received.

Accepted Answer

The Answer of Controlling interest and Equity method and Consolidated is...

Question 7

Fischer Company has decided to begin accumulating a fund for plant expansion. The company deposited $20,000 in a fund on January 2, 2012. Fischer will also deposit $60,000 annually at the end of each year, starting in 2012. The fund pays interest at 5% compounded annually. What is the balance of the fund at the end of 2016 (after the 2016 deposit)?

Accepted Answer

The answer of Fischer Company has decided to begin accumulating...

Question 8

Ultra Cosmetics acquired 10% of the 200,000 shares of common stock of Kardashian Fashion at a total cost of $14 per share on March 18, 2014. On June 30 Kardashian declared and paid a $96,000 dividend. On December 31 Kardashian reported net income of $244,000 for the year. At December 31 the market price of Kardashian Fashion was $16 per share. The stock is classified as available-for-sale.
Instructions
Prepare all the necessary entries for 2014 for Ultra Cosmetics.

Accepted Answer

The answer of Ultra Cosmetics acquired 10% of the 200,000...

Question 9

When the periodic payments are not equal in each period, the future value can be computed by using a future value of an annuity of 1 table.

Accepted Answer

A) True 
 B)False

Question 10

Mazzeo Company acquires 80 Dodd's 10%, 5 year, $1,000 bonds on January 1, 2014 for $80,000. Assume Dodd's pays interest semiannually and the July 1 entry was done correctly. Mazzeo's journal entry at December 31, 2014 would include a credit to

Accepted Answer

A)  Interest Receivable for $4,000. 
B)  Interest Revenue for $8,000. 
C)  Interest Expense for $8,000. 
D)  Interest Revenue for $4,000. 
A)  Interest Receivable for $4,000. 
B)  Interest Revenue for $8,000. 
C)  Interest Expense for $8,000. 
D)  Interest Revenue for $4,000.

Question 11

When a company holds stock of several different corporations, the group of securities is identified as a(n)

Accepted Answer

A)  affiliated investment. 
B)  consolidated portfolio. 
C)  investment portfolio. 
D)  controlling interest. 
A)  affiliated investment. 
B)  consolidated portfolio. 
C)  investment portfolio. 
D)  controlling interest.

Question 12

At January 1, 2014, the available-for-sale securities portfolio held by Darma Corporation consisted of the following investments:
1. 2,500 shares of H2 common stock purchased for $43 per share.
2. 1,500 shares of Krypto common stock purchased for $50 per share.
At December 31, 2014, the fair values per share were H2 $36 and Krypto $54.
Instructions
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2014.
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2014.

Accepted Answer

The answer of At January 1, 2014, the available-for-sale securities...

Question 13

Ken Corsig invested $20,000 at 8% annual interest and left the money invested without withdrawing any of the interest for 15 years. At the end of the 15 years, Ken withdrew the accumulated amount of money. What amount did Ken withdraw, assuming the investment earns simple interest?

Accepted Answer

A)  $25,600 
B)  $44,000 
C)  $30,000 
D)  $24,000 
A)  $25,600 
B)  $44,000 
C)  $30,000 
D)  $24,000

Question 14

On January 1, 2014, JBT Company purchased at face value, a $1,000 6%, bond that pays interest on January 1 and July 1. JBT Company has a calendar year end. The entry for the receipt of interest on January 1, 2015 is

Accepted Answer

The answer of On January 1, 2014, JBT Company purchased...

Question 15

If $13,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compound annually, what will be the balance of the account at the end of 10 years?

Accepted Answer

A)  $13,650 
B)  $211,757 
C)  $163,512 
D)  $136,500 
A)  $13,650 
B)  $211,757 
C)  $163,512 
D)  $136,500

Question 16

In order to use the cost method of accounting for stock investments, how much stock must the investor own?

Accepted Answer

A)  Less than 20%. 
B)  More than 50%. 
C)  Between 20% and 50%. 
D)  The cost method is always used for stock investments of any size. 
A)  Less than 20%. 
B)  More than 50%. 
C)  Between 20% and 50%. 
D)  The cost method is always used for stock investments of any size.

Question 17

The further removed from the present the future value is, the smaller the ____________.

Accepted Answer

The answer of The further removed from the present the...

Question 18

CGS Corporation makes an investment in 200 shares of Bama Company's common stock. The stock is purchased for $53 a share. The entry for the purchase is:

Accepted Answer

The answer of CGS Corporation makes an investment in 200...

Question 19

When a company owns more than 50% of the common stock of another company

Accepted Answer

A)  consolidated financial statements are usually prepared. 
B)  the cost method of accounting is used. 
C)  they are referred to as the subsidiary. 
D)  they recognize revenue when dividends are received. 
A)  consolidated financial statements are usually prepared. 
B)  the cost method of accounting is used. 
C)  they are referred to as the subsidiary. 
D)  they recognize revenue when dividends are received.

Question 20

In computing the present value of an annuity, it is not necessary to know the number of discount periods.

Accepted Answer

A) True 
 B)False

If the equity method is being used, the Revenue from Investment in Stock account is

If Claude Summers invests $14,962.50 now, she will receive $50,000 at the end of 14 years. What annual rate of return will Claude earn on his investment?

If Jane Key invests $15,501.28 now and she will receive $40,000 at the end of 11 years, what annual rate of interest will she be earning on her investment?

Corporations purchase investments in debt or equity securities generally for one of two reasons.

When investments in bonds are sold, any difference between the sales price and the fair value of the bonds is recorded as a gain or loss.

When the periodic payments are not equal in each period, the future value can be computed by using a future value of an annuity of 1 table.

Mazzeo Company acquires 80 Dodd's 10%, 5 year, $1,000 bonds on January 1, 2014 for $80,000. Assume Dodd's pays interest semiannually and the July 1 entry was done correctly. Mazzeo's journal entry at December 31, 2014 would include a credit to

When a company holds stock of several different corporations, the group of securities is identified as a(n)

Ken Corsig invested $20,000 at 8% annual interest and left the money invested without withdrawing any of the interest for 15 years. At the end of the 15 years, Ken withdrew the accumulated amount of money. What amount did Ken withdraw, assuming the investment earns simple interest?

On January 1, 2014, JBT Company purchased at face value, a $1,000 6%, bond that pays interest on January 1 and July 1. JBT Company has a calendar year end. The entry for the receipt of interest on January 1, 2015 is

If $13,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compound annually, what will be the balance of the account at the end of 10 years?

In order to use the cost method of accounting for stock investments, how much stock must the investor own?

The further removed from the present the future value is, the smaller the ____________.

CGS Corporation makes an investment in 200 shares of Bama Company's common stock. The stock is purchased for $53 a share. The entry for the purchase is:

When a company owns more than 50% of the common stock of another company

In computing the present value of an annuity, it is not necessary to know the number of discount periods.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters

Exam 14: Understanding Investments and Acquisitions in Accounting

If the equity method is being used, the Revenue from Investment in Stock account is

If Claude Summers invests $14,962.50 now, she will receive $50,000 at the end of 14 years. What annual rate of return will Claude earn on his investment?

If Jane Key invests $15,501.28 now and she will receive $40,000 at the end of 11 years, what annual rate of interest will she be earning on her investment?

Corporations purchase investments in debt or equity securities generally for one of two reasons.

When investments in bonds are sold, any difference between the sales price and the fair value of the bonds is recorded as a gain or loss.

When the periodic payments are not equal in each period, the future value can be computed by using a future value of an annuity of 1 table.

Mazzeo Company acquires 80 Dodd's 10%, 5 year, $1,000 bonds on January 1, 2014 for $80,000. Assume Dodd's pays interest semiannually and the July 1 entry was done correctly. Mazzeo's journal entry at December 31, 2014 would include a credit to

When a company holds stock of several different corporations, the group of securities is identified as a(n)

Ken Corsig invested $20,000 at 8% annual interest and left the money invested without withdrawing any of the interest for 15 years. At the end of the 15 years, Ken withdrew the accumulated amount of money. What amount did Ken withdraw, assuming the investment earns simple interest?

On January 1, 2014, JBT Company purchased at face value, a $1,000 6%, bond that pays interest on January 1 and July 1. JBT Company has a calendar year end. The entry for the receipt of interest on January 1, 2015 is

If $13,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compound annually, what will be the balance of the account at the end of 10 years?

In order to use the cost method of accounting for stock investments, how much stock must the investor own?

The further removed from the present the future value is, the smaller the ____________.

CGS Corporation makes an investment in 200 shares of Bama Company's common stock. The stock is purchased for $53 a share. The entry for the purchase is:

When a company owns more than 50% of the common stock of another company

In computing the present value of an annuity, it is not necessary to know the number of discount periods.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters