Exam 15: Investments and International Operations

A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:

The currency in which a company presents its financial statements is known as the:

On February 15, Seacroft buys 7,000 shares of Kebo common at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Kebo declares a dividend of $1.15 per share payable to stockholders of record on April 15. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The fair value of the remaining shares if $29.50 per share. The amount that Seacroft should report in the asset section of its year-end December 31 balance sheet for its investment in Kebo is:

A company received dividends of $0.35 per share on 300 shares of stock. The journal entry to record this transaction would be to debit Cash for $105 and credit Dividend Revenue for $105.

A company had net income of $76,000 in Year 1 and $88,000 in Year 2. Its net sales were $640,000 in Year 1 and $611,000 in Year 2. Its average total assets in Year 1 were $670,000 and $712,000 in Year 2. Calculate the profit margin, total asset turnover and return on total assets for both years. Comment on the results.

Identify the classifications for non-influential investments in securities. What are the accounting basics for non-influential investments in securities, including acquisition, dividends earned, and disposition?

Long-term investments can include:

Discuss the reasons companies make investments.

The equity method with consolidation is used in accounting for long-term investments in equity securities with controlling influence.

Long-term investments in held-to-maturity debt securities are accounted for using the __________________________.

To prepare consolidated financial statements when a U. S. parent company has an international subsidiary, the international subsidiary's financial statements must be translated into U.S. dollars.

Short-term investments are intended to be converted into cash within the longer of one year or the current operating cycle of the business, and are readily convertible to cash.