o To donload download ore more ebooks, ebooks, slides, slides, SM and and TB visit: visit: htp:/donloadslide.

blogspot.co http://downloadslide.blogspot.com

ch15
Student:

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Long-term investments are usually held as an investment of cash for use in current operations. True False Long-term investments can include funds earmarked for special purposes such as bond sinking funds. True False Bond sinking funds are examples of short-term investments. True False Equity securities reflect a creditor relationship such as investments in notes, bonds, and certificates of deposit. True False Cash equivalents are investments that are readily converted to known amounts of cash and mature within three months. True False 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. True False Long-term investments include investments in land or other assets not used in a company's operations. True False Debt securities are recorded at cost when purchased. True False Debt securities are recorded at cost when purchased, and interest revenue for investments in debt securities is recorded when earned. True False

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10. Any cash dividends received from equity securities are recorded as Dividend Expense. True False 11. When an equity security is sold, the sale proceeds are compared with the cost, and if the cost is greater than the proceeds, a gain on the sale of the security is recorded. True False 12. 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. True False 13. An investor purchased $50,000 of bonds and holds them to maturity. The investor's journal entry to record the proceeds should include a debit to Cash for $50,000 and a credit to Long-Term Investments for $50,000. True False 14. A company holds $40,000 of 7% bonds as a held-to-maturity security. Assuming all prior interest entries have been accounted for, the bondholder's journal entry to record receipt of the semiannual interest payment includes a debit to Cash for $2,800 and a credit to Interest Revenue for $2,800. True False

o To donload download ore more ebooks, ebooks, slides, slides, SM and and TB visit: visit: htp:/donloadslide.blogspot.co http://downloadslide.blogspot.com 15. A controlling investor is called the parent, and the investee company is called the subsidiary. True False 16. When an investor company owns more than 25% of the voting stock of an investee company, it has a controlling influence. True False 17. The equity method with consolidation is used in accounting for long-term investments in equity securities with controlling influence. True False 18. When the cost of a short-term held-to-maturity debt security is different from the maturity value, the difference is amortized over the remaining life of the security. True False 19. Investments in trading securities are accounted for using the equity method with consolidation. True False 20. Comprehensive income refers to all changes in equity during a period except those from owners' investments and dividends. True False 21. Consolidated financial statements show the financial position, results of operations, and cash flows of all entities under the parent's control. True False 22. Consolidated statements are prepared as if a company is organized as one entity, with the amounts allocated for subsidiaries reported in the investment accounts. True False 23. Equity securities giving an investor significant influence over an investee are always considered short- term investments. True False 24. If the exchange rate for Canadian and U.S. dollars is 0.73 82 to 1, this implies that 2 Canadian dollars will buy 1.48 worth of U.S. dollars. True False 25. Multinational corporations can be U.S. companies with operations in other countries. True False 26. Foreign exchange rates fluctuate due to many factors including changing political and economic conditions. True False 27. The price of one currency stated in terms of another currency is called a foreign exchange rate. True False 28. Return on total assets can be separated into the profit margin ratio and total asset turnover. True False 29. Profit margin is net sales divided by net income. True False 30. Net profit margin reflects the percent of net income in each dollar of net sales. True False 31. All companies desire a low return on total assets. True False

If a long-term investment in an equity security gives the investor significant influence over the investee. True False 37.7%. The securities are considered available-for-sale securities. Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.750.500. for $80.blogspot. This investment is considered to be an available-for-sale investment. True False 43. True False 36.000 difference must be reported on the income statement as a $5. Franke Co. Long-term investments in available-for-sale securities are reported at fair value on the balance sheet. Franke should record a credit to Unrealized Gain-Equity for $3. True False 39.o To donload download ore more ebooks. Held-to-maturity securities are equity securities a company intends and is able to hold until maturity.750.740. True False 42.000. True False 41. True False .000. Its profit margin equals 7.000 and its average total assets were $2.000 and its average total assets were $2.000. A company has net income of $130. Unrealized gains and losses on trading securities are reported on the income statement. purchases 2. Briar Company purchased 10. Its total asset turnover equals 4.000. On May 15. Investments in held-to-maturity debt securities are always current assets.co http://downloadslide. The $5.blogspot. the stock had a market value of $28. True False 46. True False 44. True False 47. Its net sales were $1.000. Accounting for long-term investments in held-to-maturity securities requires companies to record interest revenue as it is earned. True False 33.000 shares of Broder Corp.com 32. the stock had a market value of $85. Long-term investments in debt securities not classified as trading or held-to-maturity securities are classified as available-for-sale securities.000. On July 31 (Franke's year-end). Its net sales were $1.000. slides. On May 1.5%. True False 35. A company has net income of $130.term. slides. True False 34. True False 38. A company should report its portfolio of trading securities at its fair value. True False 40.740. Trading securities are securities that are purchased by trading other securities rather than by paying cash. Management's intent determines whether an available-for-sale security is classified as long-term or short.500.000 shares of Computech stock for $25. SM and and TB visit: visit: htp:/donloadslide. the investment is classified as available-for-sale.000 gain. Trading securities are always reported as current assets. ebooks. On September 30. True False 45.

the exchange rate decreased to $1. Sanuk purchased on credit £20. receipt of cash dividends increases the carrying (book) value of an investment in equity securities. . True False 57. Must be readily convertible to cash. A U. D. Include bonds not intended to be converted into cash. Brown Company sold supplies in the amount of 15. ebooks. dollars.69.000 worth of parts from a British company when the exchange rate was £1.500. D.000 euros to a French company when the exchange rate was $1.Term Investments for $6. parent company has an international subsidiary.o To donload download ore more ebooks. If a U. Brown must record a loss of $450. True False 52. True False 53.500 in cash dividends from its investment in JVT. Are expected to be converted into cash within one year. True False 56. True False 55. S. When using the equity method. slides. Include funds earmarked for a special purpose such as bond sinking funds.blogspot. E. The cost method of accounting is used for long-term investments in equity securities with significant influence. Include only equity securities. and are readily convertible to cash. Are current assets. At the time of payment.500 and a credit to Long. Include stocks not intended to be converted into cash. the international subsidiary's financial statements must be translated into U. True False 58.12. E. Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date. slides. True False 49. S. B. True False 50. B. When using the equity method for investments in equity securities. the investor records the receipt of cash dividends as revenue. Include sinking funds not intended to be converted into cash. C. C. Long-term investments: A.15 per euro. Micron owns 30% of JVT stock. At the year-end balance sheet date the exchange rate increased to $1. True False 54. Micron received $6.66 per British pound.co http://downloadslide. SM and and TB visit: visit: htp:/donloadslide. The entry to record receipt of these dividends includes a debit to Cash for $6. company's credit sale to an international customer allows payment to be made in a foreign currency. S.com 48. To prepare consolidated financial statements when a U. Sanuk must record a gain of $600. True False 51. the transaction is recorded using the exchange rate on the date of sale. 59. Include funds earmarked for a special purpose such as bond sinking funds. An investor presumed to have significant influence owns as least 20% but not more than 50% of another company's voting stock. operating cycle.S. Short-term investments: AAre securities that management intends to convert to cash within the longer of one year or the current .blogspot.

Investments in marketable stocks that are intended to be converted into cash in the short-term. D. 67. A company owns 9% bonds with a par value of $100. Recorded at cost plus the amount of dividend income to be received. Equity securities classified as available-for-sale record the dividend revenue when received. . Plant assets section of the balance sheet. B.o To donload download ore more ebooks. B. NSC Corporation has invested in 10% of the outstanding stock of VC Corporation. ebooks. Must retire the debt. Must record a gain or loss on the interest income earned. D. Investments in marketable bonds that are intended to be converted into cash in the short-term.500.blogspot. B. 65. Must report the dividend income accrued on the debt securities. Equity securities should be recorded at cost when acquired. 66. Current asset section of the balance sheet. Can be long-term investments. C. D. E. Equity securities are valued at fair value if classified as available-for-sale securities. a significant influence security. Can have a cost lower than the maturity value of the debt security. D. $2. B. debt securities are: A. Recorded at their cost. slides. Intangible asset section of the balance sheet. $750.000 that pay interest on October 1 and April 1. C. C. E. 61. B. D. E. Recorded at cost. the owners of debt securities: A. C. E. SM and and TB visit: visit: htp:/donloadslide. E. Long-term investments include: A. All of the following statements regarding equity securities are True except: A. 63. Equity securities are valued at fair value if classified as significant influence securities. Only investments readily convertible to cash. plus total interest that will be paid over the life of the security.com 60. a controlling influence security. Can be short-term investments. Equity section of the balance sheet. a trading security. NSC intends to actively manage this investment for profit. Not recorded.500. Non-current section of the balance sheet called long-term investments. C. Debt securities: A. B. E. Investments in bonds and stocks that are not readily convertible to cash. an available-for-sale security. B. Can have a cost higher than the maturity value of the debt security. $4. Equity securities are valued at fair value if classified as trading securities. C.000.co http://downloadslide. All of these. Long-term investments are reported in the: A. Must record a gain or loss on the dividend income earned. B. D. Must record any interest earned on the debt securities. a held-to-maturity security. 64. C. $9. The amount of interest accrued on December 31 (the company's year-end) would be: A. Investments intended to be converted to cash within one year. This investment is classified as: A. slides. At the end of the accounting period. 62. D. D. $1. Recorded at the amount of interest that will be paid over the life of the security.blogspot. because no interest is due yet.250. At acquisition. E. E. C.

000 of Cort's 8% bonds. $6. Investment method. Controlling method. $2. credit Long-Term Investments—Trading. D. $75. debit Cash. debit Cash. $75. debit Long-Term Investments-HTM. C.000.000. slides. Debit Unrealized Gain-Equity.blogspot. The bonds pay interest on February 1 and August 1. The entry to record the receipt of these dividends is: A. The company intends to hold the bonds to maturity. Everrine Corporation owns 3. $12. $12. Owner. E. debit Cash. C.000. D. B. $2.500. credit Cash. debit Cash.000. C. debit Cash.000 of 5% bonds on May 1 at par value. The amount of interest accrued on December 31 (the company's year-end) would be: A.000. The investor plans to hold the bonds until they mature. $2. $1. $75. $12. JRW Corporation has 25. D.000. E. Debit Cash. B.000. $4. credit Unrealized Gain-Equity. credit Cash.blogspot. $75. $2.000 of 8% bonds as a held-to-maturity security. $500. credit Cash.000. C. E. 73. B. Subsidiary. $12. $2. . The controlling investor is called the: A. debt Cash. $40. $6.000.000. $38.000.800 plus a broker's fee of $525 to acquire 8% bonds with a $40. Accounting for long-term investments in equity securities with controlling influence uses the: A. Consolidated method. SM and and TB visit: visit: htp:/donloadslide. A company paid $37. C. B. $4.000.000. $2000.000.000.000. Investee. 69. D. $40. Griggs Company holds $50.000. credit Unrealized Gain-Equity.000. $250. debit Cash.000.000 maturity value.000. E. D. debit Unrealized Gain-Equity.000.000. 71. $75. $12.000. 74. C. $6. $37.250. credit. credit Long-Term Investments—HTM. $12.000 shares of JRW Corporation. credit Long-Term Investments—HTM. $2. Debit Cash. the investor should prepare the following journal entry: A. Which of the following is the correct journal entry to record the receipt of the semiannual interest payment? A. An investor purchased at par value $75. E.000. A company purchased $60. B. that mature in three-years.325. C.o To donload download ore more ebooks. $12. ebooks.000. $43.800. 72. Debit Cash. Unrealized Gain-Equity. 70.000. credit Interest Revenue.000. B. The cash proceeds the company will receive when the bonds mature equal: A. Equity method with consolidation. $75. $4. credit Cash.525. $4. B.000.000. credit Long-Term Investments. $12. Parent. JRW paid $4 per share in cash dividends to its stockholders. The bonds pay interest semiannually on June 1 and December 1. credit Long-Term Investments—HTM.200.000 shares of stock outstanding.co http://downloadslide. credit Cash. credit Dividend Revenue. E.000. $6. $12. $3. When the bonds mature. debit Unrealized Gain-Equity. slides. $12. Investor method.com 68.000. D. D. Debt Long-Term Investment.

Senior entity.E. .

E. slides. All of the following statements relating to accounting for international operations are True except: A. Gains and losses reported in the income statement.blogspot. D. Do not include a balance sheet. All changes in equity for a period except those due to investments and distributions to owners. D. and the financial position of all entities under a parent's control. cash flows. Available-for-sale debt securities. Show the results of operations. A controlling influence over the investee is based on the investor owning voting stock exceeding: A. Unrealized gains and losses on long-term available-for-sale securities. Include the investments account on the balance sheet. and the financial position of the parent only.co http://downloadslide. C. B Gains and losses from foreign exchange transactions are accumulated in the Fair Value Adjustment . E. The balance in the Foreign Exchange Gain (or Loss) account is reported on the income statement. Held-to-maturity debt securities. Historical exchange rate.blogspot. 20%. SM and and TB visit: visit: htp:/donloadslide. ebooks. E. Show the results of operations. and the financial position of the subsidiary only. Long-term investments can include: A. Fair value method with fair value adjustment to equity. 79. C. E. C. Revenues and expenses reported in the income statement. 80.com 75. B. 82. C. E. Currency transaction. slides. Currency rate. International conversion rate. Cost method with amortization. D. 81. cash flows. Foreign exchange rate. Equity method. Available-for-sale equity securities. Show the results of operations. B. C. Short-term investments in held-to-maturity debt securities are accounted for using the: A. Comprehensive income includes A. Equity securities giving an investor significant influence over an investee. E. Foreign exchange gains or losses can occur when accounting for international sales transactions. Cost method without amortization. 78. B. Gains and losses from foreign exchange transactions are accumulated in the Foreign Exchange Gain (or Loss) account. Account and are reported on the balance sheet. Cost method with amortization. D. C. 50%. Fair value method with fair value adjustment to income. D. B. B. The price of one currency stated in terms of another currency is called a(n): A. Cost method without amortization. Long-term investments in held-to-maturity debt securities are accounted for using the: A. 76. B. cash flows. Fair value method with fair value adjustment to income. All of these. Consolidated financial statements: A. Foreign exchange gains or losses can occur when accounting for international purchases . C. C. D. 10%. B.o To donload download ore more ebooks. D. 30%. 40%. E. All of these. 77. Equity method. E. D. Fair value method with fair value adjustment to equity.

transactions. .

000 euros to a French company when the exchange rate was $1.500.com 83.6% D. $2. B. C.76.000. Select the correct statement from the following: A. Price-level-adjusted currency. dollars is 0.500. Specific currency.000 worth of clothing from a British company when the exchange rate was $1. $1. B.500. 84. B. neither a gain nor loss. Breanna Boutique purchased on credit £50. B. SM and and TB visit: visit: htp:/donloadslide. If the exchange rate for Canadian and U. B. Rosser must record a: A. C. A.3% B. At the year-end balance sheet date the exchange rate increased to $2.S.000. neither a gain nor loss. E.000.2759 B. Political conditions. Reporting currency. and average total assets of $500. 1. 85. C. slides. Rosser Company sold supplies in the amount of 25. Total asset turnover reflects the percent of net income in each dollar of net sales. gain of $9. Breanna Boutique must record a: A. $0. Expectations of future events. Economic conditions. Profit margin reflects a company's ability to produce net sales from total assets. dollars. Return on total assets can be separated into gross margin ratio and price-earnings ratio. None of these.97 per British pound. D. 86.000. 17% E. D.82777 D. gain of $138. A.82777 C. this implies that 3 Canadian dollars will buy ____ worth of U.82777 to 1. 88. loss of $20.co http://downloadslide.500.750. $0. 89. 87. Its return on total assets is: A. Doherty Corporation had net income of $30. At the time of payment. E. slides.750. net sales of $1.000. D. loss of $9. C. the exchange rate decreased to $0. High returns on total assets are desirable. E.82.S.o To donload download ore more ebooks. loss of $39.5% .21 per euro. Multinational currency. gain of $39. ebooks.blogspot.48 E.000. Supply and demand for currencies. Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis. E. The currency in which a company presents its financial statements is known as the: A. All of these. gain of $20. Historical cost currency. D. 200% C. loss of $138. D. C. Foreign exchange rates fluctuate due to changes in: A.blogspot.

11. D. E.01%.000. 0. 92. D. 3. 11.o To donload download ore more ebooks. Its profit margin and total asset turnover were respectively: A.5%.7%. B. D. Held-to-maturity debt securities. 12. 75. net sales of $25. and average total assets of $220.0%.000. D. SM and and TB visit: visit: htp:/donloadslide. Its profit margin and total asset turnover were. ebooks. slides. 16. 10. Its return on total assets was: A. 95. C. Its return on total assets equals: A.500. A company had a profit margin of 10.2.000. Available-for-sale securities. 11.5%. 300. and average total assets of $8. and average total assets of $1. 1. 1. 93. 0. Its return on total assets equals: A. 13.blogspot. Investments can be classified as: A.co http://downloadslide.5.5%. net sales of $380. 1. E.71% B.7%.75%. net sales of $2.com 90.3%.5.660.000. 32. 600. E.000.5. 1. 19. Trading securities. Held-to-maturity securities. C.000. 1. net sales of $300.3%. 19.000. 13.5.3%.34% D. A company had net income of $43.5% and total asset turnover of 1. B. 8. D. 1. A company had net income of $40. 13. C.0%. A company had net income of $2. All of these. B.32% 94. C.000.500.blogspot. Liquid securities. A company has net income of $250.3. Available-for-sale equity securities. E. slides. 19.2.25%. 11.000.3. D. 91.7%.000. 96. C.000. Realizable securities.00%. B.000. 12. 13. respectively: A. Investments in debt and equity securities that the company actively manages and trades for profit are referred to as short-term investments in: A.3%. B. 33.000. C.000. Available-for-sale debt securities.84. 19.0%.61% E. .3. 5. 1. 2. and average total assets of $200.66% C. E. Trading securities.73. B.64%. 13.3%. E.5%.

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n): A. E. The par value of the stock was $1 per share.500. C. Credit to Common Stock for $2. May be classified as either short-term or long-term securities. Intended to be held to maturity. Always classified as Long-Term Liabilities. slides.000. no matter what their market value. The investment is classified as available-for-sale securities. Debt securities that a company intends and is able to hold to maturity. Are reported at market value on the balance sheet. C. 103. 99.Morgan Company purchased 2. Always classified as Long-Term Investments. Debit to Long-Term Investments-AFS for $143. Unrealized loss. C. B. E. a company purchased an investment in stock for $65.000. Are long-term investments. Include only equity securities. The investment is classified as available-for-sale securities. D. Investments in trading securities: A. Credit to Common Stock for $143. 102. D. Credit to Common Stock for $143. 98.blogspot.000. D. Are recorded at cost when acquired. Are reported as current assets. B. Contingent loss.500. B. May earn dividends that are reported in that year's income statement. D. E.Available-for-Sale for $3. Recorded at cost and remain at cost over the life of the investment.blogspot. . C.com 97. All of these. Reported at historical cost. Always classified with Long-Term Liabilities. Capitalized loss. D. Debit to Unrealized Loss-Equity for $3. Realizable loss.500. Debit to Long-Term Investments-AFS for $143. The company should record a: A.375.Available-for-sale debt securities are: A.o To donload download ore more ebooks. Credit to Investment Revenue for $3. SM and and TB visit: visit: htp:/donloadslide. Are reported at their cost.000 as a long-term investment. Debit to Investment Revenue for $3. adjusted for the amortized amount of any difference between cost and maturity value. Equity securities that have a maturity value greater than cost. B. E. Morgan paid $375 in commissions on the transaction. Credit to Market Adjustment . C. C. B.375.500. The current fair value of the stock is $68. E. slides.000. ebooks. The entry to record the transaction would include a: A. D. Equity securities that a company intends and is able to hold to maturity. Market loss. C. D. A.Six months ago. B. 101 . Credit to Unrealized Gain-Equity for $3. Reported at fair value on the balance sheet.500. Include only debt securities. E.000 shares of Asta's common stock for $143. B. Held-to-maturity securities are: A.500.Available-for-sale equity securities: A.co http://downloadslide. 1 00.

000.000. Debit to Short-Term Investment-AFS for $232.800. Credit to Cash for $97. Debit to Long-Term Investments for $92. 1 10. Record an increase to the Unrealized Gain . E. C. Debit to Dividends for $97. E. 105. Report the increase in the asset section of the balance sheet. Historical cost method.000.Income account. purchased 2.450.On March 15. Effective method. Credit to Long-Term investments for $12.000 of Hennie Company's 100. 106. the stock had a fair value of $20. Credit to Cash for $16. slides. Cost with amortization method.o To donload download ore more ebooks.Micron owns 35% of Martok. Debit to Interest Revenue for $12. Beatrice Co.000 shares of Tonya Corp. Credit to Long-Term Investments for $38.Chung owns 40% of Lu's common stock. B.Available-for-Sale for $4.Equity account. Debit to Investment Revenue for $4. D. Debit to Cash for $47.800. E. Debit to Long-Term investments for $97.800. The entry to record the transaction includes a: A.Hamilton Company owns 51.blogspot. Record an increase to the Fair value Adjustment-AFS account. Credit to Unrealized Gain-Equity for $4.Vans purchased 40. E. Micron's entry to record the dividend transaction would include a: A. D. Debit to Long-Term Investments for $232. Equity method. Credit to Long-Term Investments for $25. D.750. C. stock for $35. slides. Martok pays a total of $47.000 shares of SimmTech stock for $16. This represents 40% of the outstanding stock. C.000. C. ebooks.000. Credit to Long-Term Investments for $92. Credit to Long-Term Investments for $16. Carter should do all of the following except: A.000 outstanding shares of common stock. Debit to Dividends for $38. Beatrice should record a: A.000. E.000 shares of Skechs common stock for $232. C. . B.000.450.000.com 104. On June 30. Fair value method. Credit to Investment Revenue for $4. Chung's entry to record this transaction should include a: A.800. D. Credit to Investment Revenue for $47.If a company owns more than 20% of the stock of another company and the stock is being held as a longterm investment. The investment is classified as available-for-sale securities. B. which method would the investor normally use to account for this investment? A. The investment is classified as available-for-sale securities.co http://downloadslide. B.000. Hennie Company pays $25. On October 31.750.000.000. Debit to Long-Term Investments for $16. D.blogspot. E.750. Record an increase to the Unrealized Gain .000. E. C.000. Debit to Dividend Revenue for $12. the stock had a fair value of $38.000. B. C.000.000 in total cash dividends to its shareholders.000. Hamilton's entry to record this transaction should include a: A. 109. Carter Company purchased 10. 108.000 in total cash dividends to its shareholders. Debit to Unrealized Gain-Equity for $4. which is Beatrice's year-end.450.000. Debit to Long-Term Investments-HTM for $232. B. Report the increase in the equity section of the balance sheet. SM and and TB visit: visit: htp:/donloadslide. Credit to Market Adjustment . 107. B. Lu pays $97. D.000.On July 31.000.000 in cash dividends for the period. Credit to Dividend Revenue for $25. D.000.

C. B.S. Debit Cash.A U.250. credit Dividend Revenue. credit Cash.000 shares of Warner Company stock for $39. Larsen Company purchased 5.880. $9. $77. $9. Debit Cash $39. Debit Cash $39.750. credit Long-Term Investments $47. E.500 plus a broker's fee of $1. D. $9000. Thirty days from the date of sale. $124.000.S. Debit Cash $39. When payment is received.Clark Corporation purchased 40% of IT Corporation for $125. and its net income was $72. credit Cash.When a credit sale is denominated in a foreign currency.000. IT Corporation reported net income of $150.000 shares of Warner Company for $59.200.000. D. Debit Cash.000. $95. $125. dollar value.000. $9. debit Loss on Sale of Investment $8. E.000. credit Long-Term Investments $47. Samitz Corporation declared total cash dividends of $12. C. credit Long-Term Investments $30. Year1. B.000. credit Gain on Sale of Investment $8.000 on January 1. B.000 in cash dividends from JRW Corporation. $197. During each of the next two years. credit Long-Term Investments $60. entry to record the sale of 3. C. The balance in Clark Corporation's Long-Term Investment-IT Corporation account as of December 31 should be: A. Debit Cash.000.000. Debit Cash $39. credit Interest Revenue.Everrine Corporation owns 30% of JRW Corporation. Warner declared and paid cash dividends of $0. .000 shares of common stock outstanding and it is presumed the Larsen Company will have a significant influence over Warner.200. $80.000 and $67.000. $9. At year-end. Of sale using a projected estimate of the U.280. C.000.S. Everrine Corporation received $9. ebooks.85 per share. respectively. $9. B. dollar value at payment date.800. $9.000. E.000.000 cash should be: A. B.S. The balance in the Parris Corporation's LongTerm Investment-Samitz account at December 31 should be: A.On January 4. On May 20 of the same year.000 on January 1. debit Loss on Sale of Investment $21. $100. $119. 1 12. 11 6.200. E. Samitz Corporation reported net income of $60. the foreign exchange rate used to record the sale is the current exchange rate: A. At the end of the seller's fiscal year. Year 3. SM and and TB visit: visit: htp:/donloadslide.000. C. Debt Long-Term Investment. D.000.000.000. company makes a sale to a foreign customer payable in 30 days in the customer's currency. slides.000.000. E. Of sale using the current dollar value.o To donload download ore more ebooks. 1 13. The sale would be recorded by the U. Of sale using a 30-day average U.000. company on the date: A.blogspot. $9. credit Gain on Sale of Investment $2.co http://downloadslide.blogspot. The entry to record receipt of these dividends is: A. On November 17 of the same year. D.000 for Year 1 and Year 2.300. D.000. Debit Cash $39.Parris Corporation purchased 40% of Samitz Corporation for $100. $9. At year-end.000. credit Long-Term Investments $36. Of sale using the foreign currency value.880. slides.000.500. Debit Unrealized Gain-Equity. IT Corporation declared total cash dividends of $30. Warner Company has a total of 25. The January 12. $9. C.com 11 1. credit Long-Term Investments.000. $370. debit Loss on Sale of Investment $8.000.700. B. $173.000. At the end of the buyer's fiscal year. 114. 1 15.500.

D. E. On the date final payment is made. On the date of the sale. .

com 117. need for an investment account). when Kendra prepared its financial statements..645. If the exchange rate was $1.On November 12. D.645. 119. SM and and TB visit: visit: htp:/donloadslide. credit Accounts Receivable-Kakura $12. when the exchange rate was $0. Kera should prepare the following journal entry: A. D. GAAP and IFRS are True except: A. Inc. C. B. reported in other comprehensive income. Trading securities are accounted for using fair values with unrealized gains and losses reported in net income.S.S. credit Accounts Receivable-Kakura $12. the exchange rate was $0. $12. $12. Debit Cash $12. Debit Accounts Receivable-Nakakura Company $90. ebooks. No journal entry is required until the amount is collected. B. C. slides.On November 12. B.co http://downloadslide. Kera. credit Accounts Receivable-Kakura $12. sold merchandise on credit to Nakakura Company of Japan at a price of 1. same period the investee earns that income. Company) sold merchandise to the Frater Company of Denmark for 60. $60. C Available-for-sale securities are accounted for using fair values with unrealized gains and losses . sold merchandise on credit to Kakura of Japan at a price of 1. B.All of the following statements regarding accounting for noninfluential securities under U.500.14 per euro on the date of sale and $1. D Under the consolidation method. income plus the share of investee dividends.S. credit Sales $90. 121 .S.400 loss. investee and investor revenues and expenses are combined.915. credit Foreign Exchange Gain $360. Debit Sales $90.Trading securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income. On December 31. Company. Under the consolidation method.600 loss.555. credit Foreign Exchange Gain $90. On December 31. . Accounts Receivable-Nakakura Company $90.On June 18. Debit Cash $12. credit Accounts Receivable-Kakura $12. Debit Cash $12.915. $68.600 gain.. Kendra. On January 12.000 loss.000 yen. nonintercompany assets and liabilities are combined (eliminating the . Johnson Company should recognize a foreign exchange gain or loss in the amount of: A. slides. with a payment due in 60 days. credit Foreign Exchange Gain $270. Kendra should prepare the following journal entry: A. D. GAAP and IFRS are True except: A Under the equity method. Company.blogspot. E.000 gain. Inc.00861. E.35 per euro on the date of payment. the share of investee's net income is reported in the investor's income in the .S. when Kera prepared its financial statements. when the exchange rate was $0. 120. credit Foreign Exchange Gain $90. E. Johnson Company (a U. C Under the equity method. debit Foreign Exchange Loss $360. On December 31.blogspot. the investment account equals the acquisition cost plus the share of investee . a U. B. the exchange rate was $0.500.00837 on the date of sale. Debit Foreign Exchange Loss $90.00837 per yen on the date of sale. Nakakura Company paid in full on January 12.00861. E.915.000 Euros.00 843. debit Foreign Exchange Loss $90.915. D. a U. Held-to-maturity securities are accounted for using amortized cost.00843.555. Debit Cash $12. 118. The exchange rate was $0. $60. Debit Foreign Exchange Loss $90.645.All of the following statements regarding accounting for influential securities under U. Both systems examine held-to-maturity securities for impairment. credit Foreign Exchange Gain $90. credit Accounts Receivable-Kakura $12. Kakura paid in full on January 12. Debit Cash $12.915.o To donload download ore more ebooks. C. The exchange rate was $0.000 yen.

.EU. minority interests whereas IFRS companies use noncontrolling interests. S. GAAP companies commonly refer to noncontrolling interests in consolidated subsidiaries as .

Debit Cash $8. B.000.000. C. it .Seamark buys $300. C. The journal entry to accrue interest earned at year-end December 31 is: A. credit Interest Revenue $12. excludes the cost and fair value of any securities sold. D When the period-end fair value adjustment for the portfolio of trading securities is computed.All of the following statements regarding accounting for trading securities under U.000 of Eider's 8% five-year bonds payable at par value on September 1. A debit to Short-Term Investments-AFS $300. The journal entry to record the purchase should include: A. D. Debit Interest Receivable $8. B. Interest payments are made semiannually. credit Interest Revenue $8. Other comprehensive income includes foreign currency adjustments. D. A. A debit to Long-Term Investments-HTM $300. C. Other comprehensive income includes pension adjustments. The debt securities should be recorded at the cost $300. credit Interest Receivable $8. B. A debit to Cash $300.000. C. D. Debit Cash $12. D. .blogspot. E. 124. credit Interest Revenue $8. EWhen the period-end fair value adjustment for the portfolio of trading securities is computed. Accumulated other comprehensive income is defined as the cumulative impact of other comprehensive income.000. Seamark buys $300. Interest payments are made semiannually.All of the following statements regarding accounting for trading securities under U.o To donload download ore more ebooks. slides. 126. An unrealized gain or loss is recorded with an adjusting entry at the end of each period. Interest Revenue should be credited when an interest payment is received. An unrealized gain or loss from a change in fair value is reported on the income statement. Other comprehensive income is not considered when calculating comprehensive income. The entire portfolio of trading securities is reported at is fair value.000. SM and and TB visit: visit: htp:/donloadslide.000.000.S.000.S. An unrealized gain or loss from a change in fair value is reported on the income statement.000.000. Unrealized gains and losses are recorded in a temporary account that is closed to Income Summary at the end of the period. A debit to Short-Term Investments-Trading $300. Debit Interest Revenue $8.000.com 122. B. The securities will have a maturity value of $300. A. Interest payments are made semiannually on March 1 and September 1.000.000. D. Debit Interest Receivable $12.000. 125. 127.000 of Eider's 8% five-year bonds payable at par value. E.000. A debit to Long-Term Investments-AFS $300.000. ebooks.000.000. Seamark buys $300. slides. credit Interest Revenue $12. E. Other comprehensive income includes unrealized gains and losses on available-for-sale securities. The entire portfolio of trading securities is reported at is fair value.000 of Eider's 8% five-year bonds payable at par value. 123. GAAP are True except: A.All of the following statements regarding other comprehensive income are True except: A. includes the cost and fair value of any securities sold.000. The semiannual interest payment amount is $24. C.blogspot. A realized gain or loss is recorded when the securities are sold and reported on the income statement. B. GAAP are True except: A. it .co http://downloadslide. C. All of the following regarding accounting for the securities are True except: A. The semiannual interest payment amount is $12. Seamark plans to hold the bonds for the five year life. An unrealized gain or loss is recorded with an adjusting entry when the securities are sold. B.

co http://downloadslide. credit Interest Revenue $300. Seacroft buys 7.blogspot.com 128.495.350. On March 15. credit Gain on Sale of Long. The stock is classified as available-for-sale securities. E.550. credit Gain on Sale of Long.000.000 shares of Kebo common stock at $28. Debit Cash $300. Debit Cash $300. the journal entry to record the proceeds will be: A.Debit Cash $102.050.Term Investments $2.000 shares of Kebo common stock at $28. credit Gain on Sale of Investments $8.855. The journal entry to record the dividend on April 15 is: A.Term Investments $2.645. Debit Cash $7.30 per share less a brokerage fee of $250.15 per share payable to stockholders of record on April 15.300. credit Long-Term Investments-AFS $99. credit Interest Revenue $7. C. credit Long-Term Investments-Trading $99.300.050. D. Debit Cash $300. E.30 per share less a brokerage fee of $250. Kebo declares a dividend of $1.Seamark buys $300.Debit Cash $102. Debit Long-Term Investments-AFS $199.055. E.550.000. D. 130. Debit Cash $7. On March 15. ebooks. Seacroft buys 7. credit Interest Revenue $8. D. Seamark plans to hold the bonds for the five year life. SM and and TB visit: visit: htp:/donloadslide.53 per share plus a brokerage fee of $400.110. 131. credit Cash $199. Kebo declares a dividend of $1.050.445.Term Investments $2. credit Cash $200.o To donload download ore more ebooks. The journal entry to record the purchase on February 15 is: A.000.300. credit Long-Term Investments-HTM $300. credit Dividend Revenue $7. credit Dividend Revenue $8.15 per share payable to stockholders of record on April 15.055. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.000.855.On February 15. E.000. C.855.000.050.710.710.000. Debit Long-Term Investments-HTM $199.645.Debit Cash $102.350.110. Debit Long-Term Investments-Trading $199. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29. credit Interest Receivable $300. D. Debit Cash $300. .30 per share less a brokerage fee of $250. 129.On February 15. The stock is classified as available-for-sale securities. The stock is classified as available-for-sale securities. credit Long-Term Investments-AFS $100. On March 15.000. Debit Long-Term Investments-Trading $200.Term Investments $2.000.245. Debit Cash $8. When the bonds mature.000 shares of Kebo common stock at $28.710. Interest payments are made semiannually. credit Long-Term Investments-AFS $100.710. credit Bonds Payable $300. B. C. Kebo declares a dividend of $1. Debit Long-Term Investments-AFS $200. credit Cash $199. credit Cash $199.Debit Cash $102.110.On February 15. B. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29. credit Long-Term Investments-Trading $99. Seacroft buys 7.710. slides. B. credit Gain on Sale of LongTerm Investments $2.53 per share plus a brokerage fee of $400.710. The journal entry to record the sale of the stock on November 17 is: A. B. Debit Long-Term Investments-HTM $300.blogspot.110.350. slides.000. C. Debit Cash $8. Debit Cash $8.050.53 per share plus a brokerage fee of $400. credit Cash $300.000 of Eider's 8% five-year bonds payable at par value.Debit Cash $102. credit Cash $200. credit Gain on Sale of Long.350.15 per share payable to stockholders of record on April 15. credit Gain on Sale of Long.050.

245. The fair value of the remaining shares is $29.30 per share less a brokerage fee of $250. $5.50 per share.000 shares of Kebo common at $28.440. 134. $10. The fair value of the remaining shares is $29. B.15 per share payable to stockholders of record on April 15. $3.On February 15.000 shares of Kebo common stock at $28. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29. E.On February 15.295. The stock is classified as available-for-sale securities.blogspot. Seacroft buys 7. slides. D.050. Kebo declares a dividend of $1.com 132. $2. 133. E. $6.30 per share less a brokerage fee of $250. $200.000 shares of Kebo common at $28.o To donload download ore more ebooks. SM and and TB visit: visit: htp:/donloadslide. D.co http://downloadslide. On March 15. The stock is classified as available-for-sale securities. B.050. $2. On March 15.On February 15. Kebo declares a dividend of $1.50 per share. $8. $10.195.250.390.195.15 per share payable to stockholders of record on April 15. The stock is classified as available-for-sale securities. C. ebooks. 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. $3.245. The fair value of the remaining shares if $29. .53 per share plus a brokerage fee of $400.53 per share plus a brokerage fee of $400. slides.245.295.blogspot. Seacroft buys 7. On March 15. $8.30 per share less a brokerage fee of $250. The amount that Seacroft should report on its year-end December 31 income statement related to the investment in Kebo is: A. $103. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29. $2.50 per share. B. The amount that Seacroft should report in the equity section of its year-end December 31 balance sheet for its investment in Kebo is: A.53 per share plus a brokerage fee of $400. C.110. Kebo declares a dividend of $1. Seacroft buys 7.15 per share payable to stockholders of record on April 15. C.

$3.D. . $5. E.440.195.

com 135 . slides.blogspot. 1. . Subsidiary A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock. Available Investments in equity and debt securities that are not readily for-sale convertible to cash or are not intended to be converted to cash securities in the short term.o To donload download ore more ebooks.blogspot. slides. _ 1. ebooks. SM and and TB visit: visit: htp:/donloadslide.Match the following terms with the appropriate definitions.co http://downloadslide.

__ _ _ _ Debt and equity securities not classified as trading or heldto-maturity. computed as net income divided by average total assets. Equity method 8. _ Financial statements that show the financial position. Unrealize d gain (loss) Change in market value that is not yet realizedactual through an __ _ __ _ sale. results of operations. _ Debt securities that a company intends and is able to hold until maturity.3. A measure of operating efficiency. _ _ _ _ Debt and equity securities that a company intends to actively manage and trade for profit. Trading securities 5. Consolida ted financial statements 9. Held-tomaturity securities 3. Parent company 6. and cash flows of all entities under the __ parent's control. Return on total assets 4. _ A company that owns a more than 50% controlling interest in a subsidiary. _ _ _ __ __ . Long-term investments 7. _ An accounting method for long-term investments in equity when the investor has significant influence over the investee. including those of any subsidiaries.

_ .

Discuss the reasons companies make investments.Explain the difference between short-term and long-term investments. Cite examples of each.__ 136. 137. .

What are the accounting basics for non-influential investments in securities. slides. Explain its effect on business transactions conducted in a foreign currency.Define the foreign exchange rate between two currencies. 143. .Identify the classifications for non-influential investments in securities. and disposition? 1 39. 142. SM and and TB visit: visit: htp:/donloadslide. including recording their acquisition.Explain how investors report investments in equity securities when the investor has a controlling influence over an investee.co http://downloadslide. interest earned. ebooks. and their disposal? 140. including acquisition. dividends earned.blogspot.o To donload download ore more ebooks. slides.Define the return on total assets and explain how it is used to measure a company's financial performance.blogspot.What is comprehensive income and how is it usually reported in the financial statements? 141 .com 1 38.What are the accounting basics for debt securities.

148.Explain how transactions (both sales and purchases) in a foreign currency are recorded and reported.com 144.o To donload download ore more ebooks.Explain how held-to-maturity debt securities are accounted for at and after acquisition and how they are reported in the financial statements. ebooks.Explain how equity securities having significant influence are accounted for and reported in the financial statements. SM and and TB visit: visit: htp:/donloadslide.Explain how available-for-sale debt and equity securities are accounted for at and after acquisition and how they are reported in financial statements. slides. 147.Explain how to record the sale of trading securities. 146. 145.blogspot. slides. Include a discussion of the criterion for these securities in terms of an investee's voting stock. .co http://downloadslide.blogspot.

000. 152. (3) the accrual of interest for year-end December 31. (3) Receipt of semiannual interest March 1. and the accrual of interest for the yearend December 31. The bonds pay 6% interest semiannually on September 1 and March 1. SM and and TB visit: visit: htp:/donloadslide. the receipt of the first semiannual interest payment on October 1 of the current year.On May 1 of the current year. slides. Prepare the journal entries to record the bond purchase. interest is paid semiannually on March 1 and September 1.com 149.On April 1 of the current year.000 and average total assets of $425.000. The company intends to hold these bonds until they mature.000 for 12% bonds with a par value of $500.000.000. (1)Bonds purchased on September 1. 10-year bonds with a par value of $200. 151. (4) Redemption of the bonds at maturity on August 31. and (4) the receipt of the second semiannual payment on May 1. Prepare the journal entries for the following dates and transactions related to this bond acquisition. Prepare the journal entries to record (1) the bond purchase. a company paid $200.A company reported net sales of $900. 10-year bonds with a par value of $150.blogspot. (2) Year-end adjusting entry.co http://downloadslide.blogspot. December 31. net income of $100. slides.000.o To donload download ore more ebooks. The company intends to hold the bonds until they mature.000 to purchase 8%. ebooks. (2) the receipt of the first semiannual interest payment on September 1 of the current year. The company intends to hold the bonds until they mature.000 cash to purchase 7%. interest is paid semiannually each April 1 and October 1. Calculate its return on total assets. a company paid $150. . 150.A company paid $500.

It also reported net sales of $735. Calculate the company's profit margin.100.000 in Year 2. The company's average total assets in Year 1 were $1. .co http://downloadslide.000. Calculate the return on total assets for Year 1and Year 2.000 for Year 2. total asset turnover.blogspot.A company reported net income of $275.000. total asset turnover and return on total assets for Year 1and Year 2.000 in Year 1 and $620.850. net sales of $2.A company had net income of $76. total asset turnover. Comment on the results.000 in Year 1 and $611.500.000. Comment on the results. total asset turnover and return on total assets for both years. and return on total assets.000.000 for the current year.000 in Year 2.000 in Year 2.000 and $712. and average total assets of $2. The company had average total assets of $2.000 in Year 1 and $3.500.000 and $106. Calculate the profit margin.000 in Year 2. 1 57. 155. Calculate this company's profit margin.000 and $1.o To donload download ore more ebooks. net sales of $390. Comment on the results. slides. Calculate the company's profit margin. SM and and TB visit: visit: htp:/donloadslide.A company had net income of $45.A company had net income of $450. did the company's performance improve? 154. ebooks. 156. Its net sales were $640. and return on total assets.000 in Year 2.A company reported net income for Year 1 of $98. slides.000 in Year 2.000 in Year 1 and $798.blogspot.000 in Year 2.720.000 for the current year.com 153. Its average total assets in Year 1 were $670.000. and average total assets of $250.000 in Year 1 and $88.

slides.Wiffery Company had the following trading securities in its portfolio at December 31.Halam Company had the following transactions relating to investments in trading securities during the year.com 158. The year-end cost and fair values for its portfolio follow. slides. 1 60. 159. . SM and and TB visit: visit: htp:/donloadslide.Schoodic Company had the following long-term available-for-sale securities in its portfolio at December 31 for each of the years listed. ebooks. prepare the appropriate journal entry to record each year-end market adjustment for these securities.o To donload download ore more ebooks.Trading account had a balance of zero prior to year-end adjustment. Prepare the required general journal entries for these transactions. Prepare the appropriate adjusting journal entry.co http://downloadslide. The Fair Value Adjustment .blogspot.blogspot. Beginning with Year 1.

On October 31. Inc. Prior to these transactions. It sold the shares on December 13 for $42. Prepare the journal entry to record this sale.500 of Vianco common stock with a cost of $74.. Mayfair owned 1.'s common stock. 163.co http://downloadslide.'s stock on October 31. received cash dividends of $0. 164.blogspot.o To donload download ore more ebooks. ebooks.200 shares of Carter Corp. The investment is considered available-for-sale. Mayfair Co.Columbia Corp. It sold the shares on December 13 for $55.900. . held 1.Marina.com 161. Prepare the investor's journal entry to record the receipt of the cash dividends.15 per share from its investment in Carter Corp.387. slides. Prepare the journal entry to record this sale.100.275. Clarity Corporation had the following transactions involving investments in trading securities during the year.blogspot.500 of Navia common stock with a cost of $36. SM and and TB visit: visit: htp:/donloadslide. held 1. These shares were classified as a long-term available-for-sale investment. Prepare the required general journal entries to record these transactions. slides. 162. These shares were classified as a long-term available-for-sale investment. Clarity had never had any investments in trading securities.

000. The stock purchases are considered short-term available-for-sale securities. held bonds of Schooner Corp. These are classified as long-term available-for-sale securities. slides. ebooks.Detalo Co. Prepare the journal entry to record the market value of the investments as of December 31.000 and a market value of $24. Detalo also held 1.500 shares of Avian common stock with a cost of $25.co http://downloadslide. SM and and TB visit: visit: htp:/donloadslide. 1 67.o To donload download ore more ebooks. slides. Prepare journal entries to record the transactions and events associated with the investment purchases. with a cost of $125.com 165. It had the following transactions involving availablefor-sale and held-to-maturity securities during the year.000 and a yearend fair value of $26.700. Chrono also held 1. held bonds of Ayrford Co.500 shares of Tranco common stock with a cost of $25. 1 66. Chrono Co. with a cost of $125. These are classified as long-term available-for-sale securities.700.blogspot. .blogspot.000 and a year-end fair value of $123. Prepare the journal entry to record the market value of the investments as of its December 31 year-end.100.000 and a market value of $127.Acadia had no investments prior to the current year.

000 shares of Sandia Corp. common stock at $19 per share plus a $3. This represents 30% of Sandia Corp. (1) determine the amount Eaton should report on its December 31.'s outstanding stock. Froxel Company purchased 10.o To donload download ore more ebooks.On January 2. slides. (2) determine the amount Eaton should report on its December 31.75 per share.Eaton Company had the following long-term available-for-sale securities in its portfolio at December 31. Year 2 balance sheet for its long-term investments in availablefor-sale securities. (3) prepare the necessary adjusting entry to record the fair value adjustment at December 31. SM and and TB visit: visit: htp:/donloadslide. 170.Kramer Corporation had the following long-term investment transactions. Prepare the necessary entries for Froxel to account for these transactions and events.blogspot. Sandia Corp. and on December 31 it reported net income of $150.co http://downloadslide.com 168. 169. ebooks.000 commission. Year 1 balance sheet for its long-term investments in available-for-sale securities. declared and paid cash dividends of $1. On August 6.blogspot. Prepare the journal entries Kramer Corporation should record for these transactions and events. Eaton had several long-term investment transactions during the next year. After analyzing the effects of each transaction. Year 1. slides. Year 2. .000.

.000 shares of common stock on January 1. Prepare the journal entries for Freder to record the following transactions and events: 173.com 171.On January 1.co http://downloadslide. should record to account for the dividends received and the earnings reported by Briton Corporation. On December 31.500 shares of SportTech as a long-term investment for a total of $235.000 for the year. Briton reported net income of $125. purchased 14.500 shares represent 30% of the outstanding (25.000) shares of SportTech.000.blogspot. Briton declared and paid cash dividends of $30. significant influence over Briton's management and operations. The 7. ebooks. 172.blogspot. slides.000 shares of Briton Corporation's 40. SM and and TB visit: visit: htp:/donloadslide. slides. On October 11. Freder Corporation purchased 7.o To donload download ore more ebooks.Rhone Importers purchases automotive parts from Germany. This represented 35% of Briton's outstanding shares and gave Savan Co.000.Savan Co. 2011. Prepare journal entries for the following transactions of Rhone. Prepare the journal entries Savan Co.

Prepare journal entries for the following . exports Native American artwork to Japan.174.Golden Age Co.

.transactions.

and are readily convertible to cash. SM and and TB visit: visit: htp:/donloadslide.blogspot.blogspot. imports inventory from Mexico.An investing company that owns more than________of another (investee) company's voting stock is presumed to have controlling influence over the investee.Long-term investments in held-to-maturity debt securities are accounted for using the .com 175._________________________are investments in securities that management intends to convert to cash within the longer of one year or the operating cycle. Include any year-end adjustments. 1 82. Short-term investments in held-to-maturity debt securities are accounted for using the . ebooks. 180. 181. 179. Prepare the journal entries for Texana to record the following transactions.o To donload download ore more ebooks.Investments in equity securities where the investor has a significant. 177. . but not controlling influence. 183.________________________are investments in securities that are not readily convertible to cash. slides. 176. Include any year-end adjustments. slides. are accounted for using the_______________method. 178.Mian sells American gourmet foods to merchandisers in Singapore.Texana Inc. or are not intended to be converted to cash in the short-term. Prepare the journal entries for Mian to record the following transactions.co http://downloadslide._______________________securities reflect a creditor relationship while securities reflect an owner relationship.

slides. slides.Return on total assets is computed by dividing____________by .o To donload download ore more ebooks. ebooks. Long-term investments in available-for-sale securities are reported at their________on the balance sheet.Investments in trading securities are always classified as_______________and are reported as on the balance sheet.If a U. 1 87. SM and and TB visit: visit: htp:/donloadslide. 185.__________________________are debt and equity securities that a company intends to actively manage and trade for a profit.Held-to-maturity securities are___________securities a company intends and is able to hold until maturity. 1 89.______________________refers to all changes in equity for a period except for those due to investments and distributions to owners.Investments in equity securities where the investor has a controlling influence are accounted for using the .S. 190.blogspot. 192. company makes a credit sale to a foreign company. 188.Foreign exchange rates fluctuate due to changing________________and____________conditions.An investing company that owns________of another (investee) company's voting stock (but not more than 50%) is presumed to have a significant influence over the investee.co http://downloadslide. 193. 1 86.com 1 84. 191. the sales price must be translated into dollars as of the date of .blogspot.

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63. 55. 51. 60. 47. 66. 56.blogspot. 57. 46. 37. TRUE FALSE FALSE TRUE FALSE TRUE TRUE TRUE FALSE TRUE FALSE TRUE FALSE FALSE TRUE FALSE TRUE TRUE FALSE FALSE TRUE B A C A C C E C E C C . 43.blogspot. 39. 41. 64. 62. 44. donload ore ebooks. 52. slides. 61. 58. 67. 59. 50. 40. SM and and TB visit: visit: htp:/donloadslide. 65. 49. 53. 54. 68. 42. 38.slides. 45.com Ao To B C download more ebooks.co http://downloadslide. 48.

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C 40. and cash flows of all entities under the parent's control. Three common reasons for investments are 1) to transfer excess cash into investments in order to produce higher income. All other investments in securities are long-term investments.com 37. B 46. A 133. E 130. 136. Long-term investments :: Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term. Equity securities are recorded at their cost when acquired. B 135. A 42. computed as net income divided by average total assets. 138. and Trading securities :: Debt and equity securities that a company intends to actively manage and trade for profit. 3) for strategic reasons such as investments in competitors or suppliers. Available-for-sale securities are reported . 2) to produce income from investments if the company is set up to manage mutual funds or pension funds. Non-influential investments in securities can be classified as: (1) trading. and Consolidated financial statements :: Financial statements that show the financial position.D D 134. (2) held-to-maturity. Companies make investments for several reasons. Long-term investments may include equity and debt securities and other assets not used in operations. Any cash dividends received are credited to Dividend Revenue and reported in the income statement. C 44.co http://downloadslide. slides. and Available-for-sale securities :: Debt and equity securities not classified as trading or held-to-maturity. results of operations. 137. and any gain or loss is recorded. C 50. Trading securities are reported at fair value with a fair value adjustment to income. D 47. ebooks. and Held-to-maturity securities :: Debt securities that a company intends and is able to hold until maturity. and Subsidiary :: A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock. 132.B 131. D 39. sale proceeds are compared with the cost. slides. Short-term investments are securities expected to be converted into cash within the longer of one year or the operating cycle of the company and are readily convertible to cash. C 43. A 49. and Return on total assets :: A measure of operating efficiency. and Unrealized gain (loss) :: Change in market value that is not yet realized through an actual sale. including those of any subsidiaries. and Parent company :: A company that owns a more than 50% controlling interest in a subsidiary. and (3) available-for-sale.blogspot.blogspot. and those held for a special purpose such as bond sinking funds. and Equity method :: An accounting method for long-term investments in equity when the investor has significant influence over the investee. E 38. D 45. E 41.Ao To B C donload download ore more ebooks. SM and and TB visit: visit: htp:/donloadslide. When the securities are sold. C 48.

and the debt is credited. slides. It includes all revenues. Interest must also be recorded on the interest payment dates. ebooks. 140. expenses.blogspot. If the interest periods do not match up with the investor's accounting period. An example would be an unrealized gain or loss on long-term available-for-sale securities. These items are usually reported as a part of the statement of stockholders' equity. .blogspot. interest earned and interest receivable must be accrued at year-end. 139. debt securities are recorded at cost. Comprehensive income refers to all changes in equity for a period except those due to investments and distributions to owners. and losses reported in the income statement as well as gains and losses that bypass net income. SM and and TB visit: visit: htp:/donloadslide. slides. the cash received is debited.com at fair value with a with a fair value adjustment to equity.Ao To B C donload download ore more ebooks. When the debt matures. but affect equity.co http://downloadslide. gains. At acquisition.

blogspot. results of operations and cash flows of all entities under the parent's control.com 141.Feedback: 149. slides. Answers will vary Feedback: 150. including all subsidiaries. If an investing company controls another company called the investee (such as when the investor owns more than 50% of another company's voting stock). Answers will vary o To donload download ore more ebooks. ebooks. SM and and TB visit: visit: htp:/donloadslide. .blogspot. then the investor's financial reports are prepared on a consolidated basis. These reports show the financial position.co http://downloadslide. slides.

142. A foreign exchange rate is the price of one currency stated in terms of another currency. A company with transactions in a foreign currency may experience a change in the exchange rate between the time of a transaction and its payment date. If this occurs, the company will experience a foreign exchange gain or loss. 143. The return on total assets is calculated by dividing net income by average total assets. It can be computed from the profit margin ratio and total asset turnover. The return on total assets reflects a company's ability to use its assets to make a profit. It can also be used to assess a company's performance compared to competitors. 144. When trading securities are sold, the difference between the net proceeds (sale price less fees) and the cost of the individual trading securities that are sold is recognized as a gain or loss. Any prior period fair value adjustment is not used to compute the gain or loss from the sale. Gains and losses are included in net income for the period. When the period-end fair value adjustment for the portfolio of trading securities is computed, it excludes the cost and fair value of any securities sold. 145. Held-to-maturity (HTM) debt securities are recorded at cost when purchased. After acquisition, any interest is recorded as it is earned. A HTM debt security is classified as a current asset if the maturity date is within one year or the current operating cycle. A HTM debt security is classified as a long-term asset if the maturity date extends beyond the longer of one year or the current operating cycle. Short-term HTM debt securities are not amortized. Long-term HTM debt securities are reported at their amortized cost. There is no fair value adjustment made to the portfolio of the HTM securities, whether current or long-term. 146. Available-for-sale debt and equity securities are recorded at cost when purchased. After acquisition they are reported on the balance sheet at their fair values with any unrealized holding gains or losses shown in the equity section of the balance sheet. Gains and losses realized on the subsequent sale of these investments are reported in the income statement. 147. The equity method of accounting for securities is used when an investor has a significant influence over an investee. Significant influence is presumed to exist when an investing company owns 20% or more of the investee's voting stock, but not more than 50% ownership. The equity method requires that an investor record its share of the investee's earnings with a debit to the investment account and a credit to earnings from long-term investment. Cash dividends received increase the cash account and reduce the balance of the investment account by the same amount. 148. When a selling company makes a credit sale to a foreign customer and the sales terms call for payment in a foreign currency, the selling company must translate the foreign currency into dollars to record the receivable. If the exchange rate changes before

payment is received, foreign exchange gains or losses are recognized in the year they occur. The same method is required when a buying company makes a credit purchase from a foreign supplier and is required to make payment in a foreign currency. Finally, a company with a foreign subsidiary that maintains its accounts in a foreign currency must translate these account balances into dollars before they are reported in consolidated statements.

Feedback: 151. Answers will vary

Feedback: $100,000 / $425,000 = 23.5%

Feedback: 156. Answers will vary

152.

Answers will vary

(c.) The company appears to be more efficient in the use of its assets by generating a higher return in Year 2 than in Year 1. (b.) Year 2: $620,000/$3,000,000 = 20.7% Feedback: a.) Year 1: $450,000/$2,500,000 = 18.0% 153. Answers will vary

Feedback: Answers will vary The company did not increase its profit margin from Year 1 to Year 2. Feedback: Answers will vary 155. The effect is an overall increase in return on total assets.154. . mainly because total assets declined with no ill effects on sales. it did increase its total asset turnover. however.

blogspot. Answers will vary . SM and and TB visit: visit: htp:/donloadslide.co http://downloadslide. even though sales declined from Year 1 to Year 2.com The company increased its profit margin.blogspot. Total asset turnover decreased. slides. but the increase in profit margin was large enough for there to be an overall increase in return on total assets.o To donload download ore more ebooks. slides. ebooks. Feedback: 160.

SM and and TB visit: visit: htp:/donloadslide.blogspot. slides.blogspot.o To donload download ore more ebooks.com Feedback: 157.co http://downloadslide. Answers will vary . ebooks. slides.

$394.800 = $4.200 = $11.Feedback: 158. Answers will vary Year 3: Year Year 1: $472.600 loss Feedback: 160. 000 $406.9 = $17.600 = $10.000 = $6. 500 $454.200 net gain plus prior year loss $4.200 net gain less prior year gain $6.8 $389. Answers will vary .

o To donload download ore more ebooks. slides.com Feedback: 159.blogspot. slides.co http://downloadslide. SM and and TB visit: visit: htp:/donloadslide. ebooks.blogspot. Answers will vary .

Answers will vary .Feedback: 160.

blogspot.blogspot.o To donload download ore more ebooks.co http://downloadslide. slides. ebooks. Answers will vary Feedback: 161. Answers will vary Feedback: . SM and and TB visit: visit: htp:/donloadslide. slides.com Feedback: 164. Answers will vary Feedback: 161.

161. Answers will vary .

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ebooks.blogspot.com Feedback: 166.co http://downloadslide. Answers will vary .blogspot. slides. slides. SM and and TB visit: visit: htp:/donloadslide.o To donload download ore more ebooks.

SM and and TB visit: visit: htp:/donloadslide.o To donload download ore more ebooks. ebooks. slides.blogspot.blogspot.com Feedback: 167. slides. Answers will vary .co http://downloadslide.

450 .000 = $23. SM and and TB visit: visit: htp:/donloadslide. Answers will vary .150 = $10.000 Year 1: $1. slides.blogspot. slides.342.blogspot.284. and Waterton would be reported using consolidated financial statements.$1. Year 2: $1.com Glacier would be reported using the equity method.300 loss Feedback: 168.o To donload download ore more ebooks.331.300 = $34.700 net gain plus prior year loss $23. ebooks.300 .$1.307.co http://downloadslide.

Feedback: 169. Answers will vary .

Answers will vary Feedback: 171.Feedback: 170. Answers will vary .

ebooks. SM and and TB visit: visit: htp:/donloadslide.co http://downloadslide.com Feedback: 172. Answers will vary . Answers will vary Feedback: 174.blogspot. Answers will vary Feedback: 173. slides. slides.o To donload download ore more ebooks.blogspot.

slides.co http://downloadslide. ebooks. slides.blogspot.com Feedback: 175. Answers will vary .blogspot.o To donload download ore more ebooks. SM and and TB visit: visit: htp:/donloadslide.

182. current assets Debt Fair value . 185. 181.com Feedback: 176. political net income. slides.o To donload download ore more ebooks. 189. average total assets Trading securities short-term investments. 187. 180. slides. 184.blogspot. equity 50% Cost method without amortization Cost method with amortization Equity Equity method with consolidation Comprehensive income economic. 190. ebooks. 186.blogspot. 188. 178.co http://downloadslide. 191. Short-term investments (or temporary investments) Long-term investments Debt. SM and and TB visit: visit: htp:/donloadslide. 179. 183. Answers will vary 177.

ebooks.co http://downloadslide.blogspot.blogspot. . SM and and TB visit: visit: htp:/donloadslide.com 192.o To donload download ore more ebooks. slides. 20% or more Sale. slides. 193.

blogspot.com ch15 Summary Category AACSB: Analytic AACSB: Communications AICPA BB: Decision Making AICPA BB: Global AICPA BB: Industry AICPA FN: Decision Making AICPA FN: Measurement AICPA FN: Measurement. Reporting AICPA FN: Reporting AICPA FN: Risk Analysis Blooms: Apply Blooms: Remember Blooms: Understand Difficulty: Easy Difficulty: Hard Difficulty: Medium Fundamental . # of Questions 151 42 14 30 149 14 140 2 16 21 77 64 52 66 77 50 193 22 Learning Objective: C1 Distinguish between debt and equity securities and between short-term and long-term investments.o To donload download ore more ebooks. Learning Objective: P3 Account for available-for-sale securities. Learning Objective: P1 Account for trading securities.Chapter 15 Learning Objective: A1 Compute and analyze the components of return on total assets. Learning Objective: P2 Account for held-to-maturity securities. SM and and TB visit: visit: htp:/donloadslide. 50 Learning Objective: C2 Describe how to report equity securities with controlling influence. slides.co http://downloadslide. Learning Objective: C3 Appendix 15A— Explain foreign exchange rates and record transactions listed in a foreign currency. 24 30 19 12 31 .blogspot. ebooks. slides.

SM and and TB visit: visit: htp:/donloadslide.o To donload download ore more ebooks. 21 .blogspot. slides.blogspot.com Learning Objective: P4 Account for equity securities with significant influence. slides. ebooks.co http://downloadslide.

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