16897655
Frage 1
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. investments of $110,850.
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unrealized loss of $19,750.
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investments of $91,100
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dividend revenue of $3,290
Frage 2
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gain on sale of investment of $19,900.
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. unrealized gain of $19,900.
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dividend revenue of $3,290
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investments of $89,050.
Frage 3
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. Dividends received on an equity-method investment
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increase the investment account
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increase dividend revenue.
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decrease the investment account.
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increase owners’ equity
Frage 4
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The starting point in accounting for all investments is
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equity value.
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cost.
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c. market value on the Balance-Sheet date.
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cost minus dividends.
Frage 5
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Consolidation accounting
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combines the accounts of the parent company and those of the subsidiary companies.
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eliminates all liabilities
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reports the receivables and payables of the parent company only
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all of the above.
Frage 6
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On January 1, 20X0, Maxspace, Inc., purchased $100,000 face value of the 5% bonds
of Mail Frontier, Inc., at 107. The bonds mature on January 1, 20X5. For the year ended
December 31, 20X5, Maxspace received cash interest of
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. $2,000
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$3,000.
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$4,000
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$5,000
Frage 7
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Return to Maxspace, Inc.’s bond investment in the preceding question. For the year
ended December 31, 20X3, Maxspace received cash interest of $5,000. What was the interest
revenue that Maxspace earned in this period?
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$5,000
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$3,600
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$7,000
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$2,000
Frage 8
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Providence Systems purchased inventory on account from Megasonic. The price was
¥80,000, and a yen was quoted at $0.0088. Providence paid the debt in yen a month later, when
the price of a yen was $0.0093. Providence
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debited Inventory for $744
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recorded a Foreign Currency Transaction Gain of $40.
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. debited Inventory for $704.
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none of the above.
Frage 9
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One way to prevent a foreign currency transaction loss is to
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. offset foreign currency inventory and PPE.
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pay debts as late as possible.
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pay in the foreign currency.
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collect in your currency.
Frage 10
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Foreign currency transaction gains and losses are reported on the
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. consolidation worksheet.
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Income Statement.
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statement of cash flows
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. Balance Sheet.
Frage 11
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Consolidation of a foreign subsidiary usually results in a
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gain or loss on consolidation.
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foreign currency translation adjustment.
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foreign currency transaction gain or loss.
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LIFO/FIFO difference.
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