ACC 557 Week 9 Quiz
Popular in Department
This 0 page Study Guide was uploaded by an elite notetaker on Wednesday November 11, 2015. The Study Guide belongs to fin571 at Kaplan University taught by in Fall 2015. Since its upload, it has received 64 views.
Reviews for ACC 557 Week 9 Quiz
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 11/11/15
1 Multiple Choice Question 57 Eck Corporation sells 250 shares of common stock being held as an investment The shares were acquired six months ago at a cost of 25 a share Eck sold the shares for 40 a share The entry to record the sale is Cash 10000 p IGaln on Sale of Stock 3750 nvestments Stock Investments 6250 Stock Investments 10000 Cash 10000 Cash 10000 p Stock Investments 10000 Cash 6250 p Loss on Sale of Stock Investments 3750 Stock Investments 10000 2 Multiple Choice Question 45 On January 1 Talent Company purchased as a shortterm investment a 1000 8 bond for 1050 The bond pays interest on January 1 and July 1 The bond is sold on October 1 for 1200 plus accrued interest Interest has not been accrued since the last interest payment date What is the entry to record the cash proceeds at the time the bond is sold Cash 1200 p Debt Investments 1200 Cash 1220 r Debt Investments 1050 Gain on Sale of Debt 150 Investments Interest Revenue 20 Cash 1220 r Debt Investments 1200 Interest Revenue 20 Cash 1200 f Debt Investments 1050 Gain on Sale of Debt Investments 150 3 Multiple Choice Question 117 At the end of its rst year the trading securities portfolio consisted of the following common stocks Cost Fair Value Atrium Corporation 46400 50000 Barnes Inc 60000 55800 Cantor Corporation 80000 76000 186400 181800 In the following year the Barnes common stock is sold for cash proceeds of 56000 The gain or loss to be recognized on the sale is a loss of 4000 gain of 1200 Irvu gain of 200 loss of 4200 4 Multiple Choice Question 40 At the time of acquisition of a debt investment p the Stock Investments account is debited when bonds are purchased p the Investment account is credited for its cost plus brokerage fees p no journal entry is required p the cost principle applies 5 Multiple Choice Question 79 The account Stock Investments is p a general ledger control account another name for Debt Investments p a subsidiary ledger account p a longterm liability account 6 Multiple Choice Question 59 Tan Company had these transactions pertaining to stock investments Feb 1 Purchased 3000 shares of Norton Company 10 for 48800 cash plus brokerage fees of 1400 June 1 Received cash dividends of 2 per share on Norton stock Oct 1 Sold 1200 shares of Norton stock for 24000 less brokerage fees of 600 The entry to record the purchase of the Norton stock would include a r credit to Cash for 48800 p debit to Stock Investments for 48800 p debit to Stock Investments for 50200 p debit to Investment Expense for 1400 7 Multiple Choice Question 94 Mission Inc earns 450000 and pays cash dividends of 150000 during 2013 Cox Corporation owns 70000 of the 210000 outstanding shares of Mission How much revenue from investment should Cox report in 2013 p 150000 200000 50000 100000 8 Multiple Choice Question 138 Which of the following reasons best explains why a company that experiences seasonal uctuations in sales may purchase investments in debt or stock securities If The company may have excess cash r The company may invest for speculative reasons to increase the value in pension funds r The company may generate a signi cant portion of its earnings from investment income If The company may invest for the strategic reason of establishing a presence in a related industry 9 Multiple Choice Question 115 The balance sheet presentation of an unrealized loss on a nontrading security is similar to the statement presentation of f treasury stock fu discount on bonds payable Irvu prepaid expenses r allowance for doubtful accounts 10 Multiple Choice Question 142 A company that acquires less than 20 ownership interest in another company should account for the stock investment in that company using a the signi cant method F the equity method in consolidated nancial statements a the cost method 11 Multiple Choice Question 41 Which of the following is nota true statement regarding shortterm debt investments r Investments are frequently government or corporate bonds If The securities usually pay interest r This type of investment must be currently traded in the securities market r Debt investments are recorded at the price paid less brokerage fees 12 Multiple Choice Question 81 Revenue is recognized when cash dividends are received under Irvu the cost method F the equity method f u the controlling interest method If both the cost and equity methods 13 Multiple Choice Question 145 An unrealized loss on nontrading securities is r closedout at the end of the accounting period r deducted from the cost of the investment If reported as a separate component of stockholders39 equity reported under Other Expenses and Losses in the income statement 14 Multiple Choice Question 93 Mission Inc earns 600000 and pays cash dividends of 150000 during 2013 Cox Corporation owns 70000 of the 210000 outstanding shares of Mission What amount should Cox show in the investment account at December 31 2013 if the beginning of the year balance in the account was 40000 ANSWER IS 190000 200000 175000 180000 15 Multiple Choice Question 108 The contraaccount Fair value Adjustment is also called an lf valuation account f offset account ft opposite account ft adjustment account 16
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'