Global’s Balance Sheet should report
. investments of $110,850.
unrealized loss of $19,750.
investments of $91,100
dividend revenue of $3,290
Global’s Income Statement should report
gain on sale of investment of $19,900.
. unrealized gain of $19,900.
investments of $89,050.
. Dividends received on an equity-method investment
increase the investment account
increase dividend revenue.
decrease the investment account.
increase owners’ equity
The starting point in accounting for all investments is
equity value.
cost.
c. market value on the Balance-Sheet date.
cost minus dividends.
Consolidation accounting
combines the accounts of the parent company and those of the subsidiary companies.
eliminates all liabilities
reports the receivables and payables of the parent company only
all of the above.
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
. $2,000
$3,000.
$4,000
$5,000
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?
$3,600
$7,000
$2,000
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
debited Inventory for $744
recorded a Foreign Currency Transaction Gain of $40.
. debited Inventory for $704.
none of the above.
One way to prevent a foreign currency transaction loss is to
. offset foreign currency inventory and PPE.
pay debts as late as possible.
pay in the foreign currency.
collect in your currency.
Foreign currency transaction gains and losses are reported on the
. consolidation worksheet.
Income Statement.
statement of cash flows
. Balance Sheet.
Consolidation of a foreign subsidiary usually results in a
gain or loss on consolidation.
foreign currency translation adjustment.
foreign currency transaction gain or loss.
LIFO/FIFO difference.
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