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Exam 15: Investments and International Operations

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Question 81

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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.

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B) False

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Question 82

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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.

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Question 83

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A company has net income of $130,500.Its net sales were $1,740,000 and its total assets were $2,750,000.Its profit margin equals 7.5%.

Cash equivalents are investments that are readily converted to known amounts of cash that mature within three months.

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment,which method would the investor normally use to account for this investment?

Detalo Co.held bonds of Schooner Corp.with a cost of $125,000 and a market value of $127,000.Detalo also held 1,500 shares of Tranco common stock with a cost of $25,000 and a market value of $24,700.These are classified as long-term available-for-sale securities.Prepare the journal entry to record the market value of the investments as of December 31.

What are the accounting basics for debt securities,including recording their acquisition,interest earned and their disposal?

Mian,Inc.,sells American gourmet foods to merchandisers in Singapore.Prepare the journal entries for Mian to record the following transactions.Include any year-end adjustments.

If a U.S.company makes a credit sale to a foreign company,the sales price must be translated into dollars as of the date of _____________.

Define the return on total assets and explain how it is used to measure a company's financial performance.

Equity securities are:

On September 1,2014,Rode Corp.paid $100,000 plus a brokerage fee in the amount of $500 to buy Liston's 6%,two-year bonds payable with a $100,000 par value.The bonds pay interest semiannually on June 30 and December 31.Rode intends to hold the bonds until they mature on December 31,2016.How would Rode record the adjusting entry relating to these bonds on December 31,2014?

On January 1,2011,Posten Company purchased 10,000 shares of Toma Company for $78,000 plus a broker's fee of $2,000.Toma Company has a total of 40,000 shares of common stock outstanding and it is presumed the Posten Company will have a significant influence over Toma.Toma declared and paid cash dividends of $0.93 per share in 2011 and 2012.Toma's net income was $190,000 and $270,000 for 2011 and 2012 respectively.The January 1,2013,entry on the books of Posten Company to record the sale of 4,500 shares of Toma Company stock for $85,000 cash should be:

On September 13,2013,MTA Corp.acquired 50 shares of Vista,Inc.for $100 per share as a long-term available-for-sale security.At December 31,2013,the Vista shares had a fair value of $105 per share and MTA recorded the required adjusting entry to record the fair value of the Vista investment.At December 31,2104,the Vista shares had a fair value of $102 per share.How would the company record the adjustment to fair value?

All companies desire a low return on total assets.

Held-to-maturity securities are ____________ securities a company intends and is able to hold until maturity.

Foreign exchange rates fluctuate due to changing _______________ and ___________ conditions.

At acquisition,debt securities are:

At the end of the accounting period,the owners of debt securities:

Investments in trading securities are always classified as ______________ and are reported as _______________ on the balance sheet.