Exam 8: Investing Activities

Ownership of 50% or more of the voting stock of another company implies an ability to ____________________ the company and _________________ should be prepared

Currently,the FASB's Statements of Accounting Concepts (Nos.5 and 6)define an asset as having all of the following characteristics except:

How should Focus Company record expenditures for research and development costs according to U.S.GAAP?

When dividends from an investment are recognized as a reduction of the investment account,the investment must have been of which type?

Expenditures included in the cost of a long-lived asset are:

Using the information below,calculate the average total depreciable life of the assets:

When a firm sells a trading security,it recognizes:

Stock Trader,Inc.began operations in 2012.Stock Trader has acquired a number of equity investments during 2012.None have been sold.Stock Trader exerts no influence over any of its investments each of which represents a small percentage of the investee.An analysis of Stock Trader's investment portfolios shows the following totals at December 31,2012: Based on the information provided,describe how Stock Trader would present this information in its financial statements.You should discuss what amounts would appear in each financial statement.

Which of the following is the least effective way for an analyst to understand whether existing long-lived assets must be replaced?

U.S.GAAP requires firms to expense immediately all internal expenditures for R&D costs.Alternatively,U.S.GAAP could require firms to capitalize and subsequently amortize all internal expenditures on R&D that have future potential. Required: Why have standard setters chosen not to allow the capitalization alternative? How would analysts be better served if U.S.GAAP required capitalization of R&D costs?

Firms recognize an impairment loss when the carrying amount of a tangible fixed asset is deemed "not recoverable" as specified by GAAP.GAAP defines a carrying amount as "not recoverable" if:

Record Corporation CD Inc.acquires 100% of the outstanding shares of Record Corp.for $1,200,000 and accounts for the transaction using the purchase method.Record Corp's balance sheet at the date of acquisition appears below: -Based on the information concerning Record Corp. ,what is the market value of the company's shareholders' equity at the acquisition date?

When dividends from an investment are recognized as income,the investment must have been of which type?

United owns Estada,a European based subsidiary for which the Euro is the functional currency.Estada had a net asset position at January 1,2012 of 1,200,000 Euros and reported income of 350,000 Euros for 2012,which was earned evenly throughout the year.In addition,Estada paid 100,000 Euros of dividends at December 31,2012.The following were in effect during 2012: Determine the amount of the unrealized translation gain or loss United should record for 2012 with respect to Estada.