FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Investments

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Essay

Review LaterAdd Note

Review Later

On February 1, Milo Company purchased 1,000 ordinary shares (2% ownership) of Werth Company for $32 per share. On March 20, Milo Company sold 200 shares of Werth for $5,800, Milo received a dividend of $1.00 per share on April 25. On June 15, Milo sold 300 shares of Werth for $10,200. Instructions Prepare the journal entries to record the transactions described above.

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Reporting investments at fair value is

A) applicable to share securities only.
B) applicable to debt securities only.
C) applicable to both debt and share securities.
D) a conservative approach because only losses are recognized.

E) B) and C)
F) B) and D)

Correct Answer

verified

Show Answer

Question 53

Essay

Review LaterAdd Note

On January 1, Kingman Corporation purchased a 40% equity in Lewis Company for $360,000. At December 31, Lewis declared and paid a $40,000 cash dividend and reported net income of $98,000. Prepare the necessary journal entries for Kingman Corporation.

Desmond Corporation owns 3,500 of the 10,000 outstanding ordinary shares of Wetmore Corporation. During 2014, Wetmore earned £2,400,000 and paid cash dividends of £800,000. How much investment revenue should Desmond report in 2014?

At the end of its first year, the trading securities portfolio consisted of the following ordinary shares. In the following year, the Benes ordinary shares are sold for cash proceeds of $58,000. The gain or loss to be recognized on the sale is a

Short-term share investments should be valued on the statement of financial position at

Fair Value Adjustment is a valuation ______________ account which is ______________ to (from) the cost of the investments.

Consolidated financial statements should be prepared only when a subsidiary company has a controlling interest in the parent company.

On January 1, Burkett Company purchased as an investment a $1,000, 6% bond for $1,000. The bond pays interest on January 1 and July 1. What is the entry to record the interest accrual on December 31?

Unrealized gains and losses on non-trading securities are reported as a separate component of equity on the statement of financial position.

Which of the following is the correct matching concerning the appropriate accounting for long-term share investments?

Nagen Company had these transactions pertaining to share investments: Feb. 1 Purchased 2,000 shares of Horton Company (10%) for ₤34,000 cash. June 1 Received cash dividends of ₤2 per share on Horton shares. Oct) 1 Sold 800 Horton shares for ₤15,600. The entry to record the purchase of the Horton shares would include a

On January 5, 2014, Reiley Company purchased the following share securities as a long-term investment: 300 ordinary shares Holle Corporation for $4,200. 500 ordinary shares Wood Corporation for $10,000. 600 ordinary shares Kiley Corporation for $19,800. Assume that Reiley Company cannot exercise significant influence over the activities of the investee companies and that the cost method is used to account for the investments. On June 30, 2014, Reiley Company received the following cash dividends: On November 15, 2014, Reiley Company sold 200 shares of Kiley Corporation for $7,500. On December 31, 2014, the fair value of the securities held by Reiley Company is as follows: Instructions Prepare the appropriate journal entries that Reiley Company should make on the following dates:

Tolan Co. purchased 60, 6% Irick Company bonds for $60,000 cash. Interest is payable semiannually on July 1 and January 1. If 30 of the securities are sold on May 1 for $31,000 plus accrued interest, the entry would include a credit to Gain on Sale of Debt Investments for

The following transactions were made by Waite Company. Assume all investments are short-term and are readily marketable. June 2 Purchased 300 ordinary shares of Dolen Corporation for $45 per share. July 1 Purchased 200 Oslo Corporation bonds for $220,000. 30 Received a cash dividend of $2 per share from Dolen Corporation. Sept. 15 Sold 90 shares of Dolen Corporation for $50 per share. Dec. 31 Received semiannual interest check for $11,000 from Oslo Corporation. 31 Received a cash dividend of $2 per share from Dolen Corporation. Instructions Journalize the transactions.

Short-term investments are listed on the statement of financial position immediately above

Which of the following is not a true statement regarding short-term debt investments?

Which of the following is not true regarding the Fair Value Adjustment - Trading account?

Which of the following reasons best explains why a company that experiences seasonal fluctuations in sales may purchase investments in debt or share securities?

The balance in the Unrealized Loss-Equity account will