Exam 15: Investments

Ashbrook Services,Inc.acquired 126,000 shares of Gamma Metals,Inc.on January 1,2017.Gamma declares a cash dividend of $2.25 per share on February 15,2017 and pays the cash dividend on March 2,2017.With the current investment,Ashbrook Services,Inc.holds 11% of Gamma's voting stock.Which of the following will be the correct journal entry for the day when the dividend payment is made (March 2,2017)?

Which of the following is included in comprehensive income?

A security is a share or interest representing financial value.

A security is a ________.

Aurum Services,Inc.acquired 100,000 shares of Gamma Metals,Inc.on January 1,2017.Gamma pays a cash dividend of $0.25 per share on March 2,2017.With the current investment,Aurum Services,Inc.holds 8% of Gamma.In the journal entry on March 2,2017,________.

Which of the following securities pay dividends?

Realized gains or losses on available-for-sale investments represent the difference between the ________.

Trading investments include ________.

All available-for-sale investments are reported as long-term assets on the balance sheet.

Which of the following will be classified as a held-to-maturity investment?

Eliasen,Inc.invests its excess cash in Creative Technologies,Inc.and acquires 4,400 shares for $32.25 per share.Eliasen,Inc.owns less than 1% of Creative's voting stock and plans to hold the stock for two years.Which of the following is the correct journal entry for the transaction?

A debt security ________.

The rate of return on total assets measures a company's ________.

Mars Services,Inc.pays $700,000 to acquire 30% (200,000 shares)of voting stock of Grey Investments,Inc.on January 5,2017.Grey Investments,Inc.declares and pays a cash dividend of $4.4 per share on June 14,2017.Which of the following is the correct journal entry for the transaction on June 14,2017?

Pan Services,Inc.owns 35% of voting stock of Grey Investments,Inc.During the year 2017,Grey Investments,Inc.earned profits of $310,000.Under the equity method,which of the following journal entries will Pan Services record?

Securities are represented by a certificate and are commonly traded on an exchange.

Equity securities in which the investor owns less than 20% ownership in the voting stock of the investee can be ________.

Companies invest in trading investments with the intent of ________.

For available-for-sale investments,state: • Reporting method used • How unrealized holding gain or loss is reported • Balance sheet effects • Income statement effects

For trading investments,provide the following: • Reporting method used • How unrealized holding gain or loss is reported • Balance sheet effects • Income statement effects