FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Investments and Fair Value Accounting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Essay

Review LaterAdd Note

Review Later

Prepare the journal entries for the following transactions for Batson Co.

Correct Answer

verified

Sept.1 De...

View Answer

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

Journalize the entries to record the following selected equity investment transactions completed by Perry Company during the current year.Perry accounts for this investment using the cost method.​

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

The cost and fair value of the trading securities held by Lindy Company as of December 31 are as follows:​​ (a) Complete the table above to find the total cost and fair value for the company's trading securities portfolio. (b)Calculate and record the required December 31 adjustment. (c)Explain how the adjustment from part (b)is reported on Lindy's financial statements.

Wendell Company owns 28% of the common stock of Porter Company and accounts for the investment using the equity method.Assuming that Wendell Company purchased the stock several years ago,the balance in the investment account would be equal to the cost of the

On March 1,Year 1,Chase Inc.purchases 35% of the outstanding shares of Glory Corporation stock for $325,000.On December 31,Year 1,Glory reports net income of $162,000.On January 15,Year 2,Glory pays total dividends to stockholders of $33,000.Journalize the three transactions.

The equity method is usually more appropriate for accounting for investments where the purchaser does not have significant influence over the investee.

Which of the following is part of the primary objective of investing in temporary investments?

Alan Company purchased $400,000 of ABC Co.5% bonds at 100 plus accrued interest of $4,500.Alan later sold $250,000 of the bonds at 97.The journal entry for the purchase would include a

Blanton Corporation purchased 35% of the outstanding shares of common stock of Worton Corporation as a long-term investment.Subsequently,Worton Corporation reported net income and declared and paid cash dividends.What journal entry would Blanton Corporation use to record the dividends it receives from Worton Corporation?

On May 1,Cedar Inc.purchases $100,000 of 10-year,Madison Corporation 6% bonds dated March 1 at 100 plus accrued interest.Journalize the entry to record the semiannual receipt of interest on September 1.

Financial statements include assets listed at

Match each of the definitions that follow with the appropriate investment term (a-j) . -The company whose stock is purchased by another entity

Match each of the definitions that follow with the appropriate investment term (a-j) . -Measurement of the rate of return to stockholders based on cash dividends

Investment in Bonds is listed on the balance sheet after Bonds Payable.

Match each of the definitions that follow with the appropriate investment term (a-j) . -Debt investments that a company intends to keep until their maturity date

An equity investment in less than 20% of another company's stock is accounted for using the cost method.

The equity method causes the investment account to mirror the proportional changes in book value of the investee.

Trading securities should be reported on the financial statements at fair market value.

On August 1,Year 1,Ant Company sold Bee Company $1,500,000 of 10-year,6% bonds,dated July 1 at 100 plus accrued interest.On March 1,Year 2,Bee sold half of the bonds for $782,500 plus accrued interest.Present entries to record the following transactions:

Journalize the entries to record the following selected transactions of Oliver Co.: