Based on the following information for Montana Investments,Inc.,compute the rate of return on total assets.(Round the percentage to two decimal places.) \[\begin{array} { | l | l | } \hline \text { Total Assets, December 31,2019 } & \$ 191,000 \\ \hline \text { Total Assets, December 31,2018 } & \$ 149,000 \\ \hline \text { For Year Ended December 31, 2019: } & \\ \hline \text { Interest Expense } & \$ 15,000 \\ \hline \text { Net Income } & \$ 18,000 \\ \hline \end{array}\]

A) 9.42% B) 19.41% C) 9.71% D) 1.76% A) 9.42% B) 19.41% C) 9.71% D) 1.76%

Exam 15: Investments

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Based on the following information for Montana Investments,Inc.,compute the rate of return on total assets.(Round the percentage to two decimal places.) Total Assets, December 31,2019 \ 191,000 Total Assets, December 31,2018 \ 149,000 For Year Ended December 31, 2019: Interest Expense \ 15,000 Net Income \ 18,000

(Multiple Choice)

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Question 181

Gaines Corporation invested $114,000 to acquire 24,000 shares of Owens Technologies,Inc.on March 1,2018.On July 2,2019,Owens pays a cash dividend of $3.25 per share.The investment is classified as equity securities with no significant influence.Which of the following is the correct journal entry to record the transaction on July 2,2019?

(Multiple Choice)

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Question 182

Land Services,Inc.owns 32% of voting stock of World Investments,Inc.During the year 2018,World Investments,Inc.earned profits of $320,000.Under the equity method,which of the following journal entries will Land Services record?

(Multiple Choice)

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Question 183

Equity securities,in which the investor lacks the ability to participate in the decisions of the investee company,are initially accounted for at the lower-of-cost-or-market value.

(True/False)

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Question 184

The Unrealized Holding Gain-Available-for-Sale account and Unrealized Holding Loss-Available-for-Sale account are included the Other Income and (Expenses)section of the income statement.

(True/False)

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Question 185

Dividends received for equity securities in which the investor lacks the ability to participate in the decisions of the investee company are recorded with a debit to the Dividend Revenue account.

(True/False)

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Question 186

Which of the following is the correct formula for calculating rate of return on total assets?

(Multiple Choice)

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Question 187

Roger Technologies invests $50,000 to acquire $50,000 face value,8%,five-year corporate bonds on January 2,2017.The bonds will mature on January 2,2022.The bonds pay interest semiannually on January 2 and July 2 each year until maturity.When Roger Technologies receives interest payments,how is the accounting equation affected?

(Multiple Choice)

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Question 188

Which statement regarding investments in equity securities is incorrect?

(Multiple Choice)

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Question 189

A ________ ownership in the investee's voting stock can significantly influence the investee's decisions.

(Multiple Choice)

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Question 190

Which of the following is TRUE of available-for-sale (AFS)debt investments?

(Multiple Choice)

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Question 191

An equity security does not represent an ownership interest in a corporation,although it pays dividends.

(True/False)

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Question 192

Purple Corporation pays $536,000 to acquire 40% of the equity securities of Blue,Inc.on May 5,2019.In the journal entry to record this transaction ________.

(Multiple Choice)

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Question 193

Showing 181 - 193 of 193

Land Services,Inc.owns 32% of voting stock of World Investments,Inc.During the year 2018,World Investments,Inc.earned profits of $320,000.Under the equity method,which of the following journal entries will Land Services record?

Equity securities,in which the investor lacks the ability to participate in the decisions of the investee company,are initially accounted for at the lower-of-cost-or-market value.

The Unrealized Holding Gain-Available-for-Sale account and Unrealized Holding Loss-Available-for-Sale account are included the Other Income and (Expenses)section of the income statement.

Dividends received for equity securities in which the investor lacks the ability to participate in the decisions of the investee company are recorded with a debit to the Dividend Revenue account.

Which of the following is the correct formula for calculating rate of return on total assets?

Which statement regarding investments in equity securities is incorrect?

A ________ ownership in the investee's voting stock can significantly influence the investee's decisions.

Which of the following is TRUE of available-for-sale (AFS)debt investments?

An equity security does not represent an ownership interest in a corporation,although it pays dividends.

Purple Corporation pays $536,000 to acquire 40% of the equity securities of Blue,Inc.on May 5,2019.In the journal entry to record this transaction ________.

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