Question :
86. If one company owns more than 50% of the common : 1226730
86. If one company owns more than 50% of the common stock of another company
A. a partnership exists.
B. a parent–subsidiary relationship exists.
C. the company whose stock is owned must be liquidated
D. the cost method should be used to account for the investment.
87. Yankton Company began the year without an investment portfolio. During the year they purchased investments classified as trading securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. The Yankton Company’s financial statements for the current year should show
A. a loss of $2,000 on the income statement and net trading securities of $13,000 on the balance sheet
B. no loss on the income statement and net trading securities of $13,000 on the balance sheet
C. no loss on the income statement, net trading securities of $11,000 and an unrealized loss of $2,000 as a stockholders’ equity adjustment on the balance sheet
D. a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet
88. Yankton Company began the year without an investment portfolio. During the year they purchased investments classified as available-for-sale securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. The Yankton Company’s financial statements for the current year should show
A. a loss of $2,000 on the income statement and available-for-sale securities of $13,000 on the balance sheet
B. no loss on the income statement and available-for-sale securities of $13,000 on the balance sheet
C. no loss on the income statement, available-for-sale securities of $11,000 and an unrealized loss of $2,000 as a stockholders’ equity adjustment on the balance sheet
D. a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet
89. The account Unrealized Gain (Loss) on Available-For-Sale Securities should be included in the
A. Income statement as Other Revenue (Expenses)
B. Balance sheet as an adjustment to the asset account
C. Balance sheet as an adjustment to Stockholders’ Equity
D. Statement of Retained Earnings
90. The account Unrealized Gain (Loss) on Trading Securities should be included in the
A. Income statement as Other Revenue (Expenses)
B. Balance sheet as an adjustment to the asset account
C. Balance sheet as an adjustment to Stockholders’ Equity
D. Statement of Retained Earnings
91. The account Valuation Allowance for Trading Securities is found on the:
A. Income statement as Other Revenue (Expenses)
B. Balance sheet as an adjustment to the asset account
C. Balance sheet as an adjustment to Stockholders’ Equity
D. Statement of Retained Earnings
92. Held-to-Maturity securities
A. are reported at their fair market value on the balance sheet date
B. include both stocks and bonds
C. are primarily purchased to earn interest revenue
D. all of the above
93. On January 1, 2011, Blanton Company’s Valuation Allowance for Trading Investments account has a debit balance of $22,500. On December 31, 2011, the cost of the trading securities portfolio was $80,000. The fair value was $98,000. Which of the following would Blanton report on the income statement for 2011?
A. an Unrealized Loss on Trading Investments of $4,500.
B. an Unrealized Gain on Trading Investments of $4,500.
C. an Unrealized Gain on Trading Investments of $18,000.
D. an Unrealized Loss on Trading Investments of $18,000.
94. All of the following are disadvantages of fair value use except:
A. fair values may not be readily obtainable.
B. fair values may cause more fluctuations as change occurs from period to period.
C. comparability between companies may be impacted by different fair value measurement.
D. fair values can only be used on balance sheet accounts.
95. All of the following are factors contributing to the trend for regulators to adopt accounting principles using fair value concepts except:
A. a greater percentage of total assets existing as receivables and securities.
B. pressure on regulators to adopt an international set of accounting principles and standards.
C. hybrid measurement methods within GAAP that conflict with each other.
D. the ease of applying market values to assets and liabilities.
96. Edison Corporation paid a dividend of $10 per share on its $100 par preferred stock and $2 per share on its $10 par common stock. The market value of the common stock is $80 per share. Edison’s dividend yield is:
A. 2.5%
B. 10%
C. 15%
D. 20%
97. A company that has 25,000 shares of $5.00 par value common stock issued and outstanding paid a dividend of $.75 per share. The market value of the stock is $20.00 per share. The company’s dividend yield is:
A. 3.75%
B. 400%
C. 15%
D. 25%
98. Which of the following is not a part of comprehensive income?
A. foreign currency items
B. restructuring charges
C. unrealized gains and losses
D. pension liability adjustments
99. Which of the following would be considered an “Other Comprehensive Income” item?
A. net income.
B. extraordinary loss related to flood.
C. gain on disposal of discontinued operations.
D. unrealized loss on available-for-sale securities.
100. Companies may report comprehensive income on each of the statements below except
A. income statement
B. separate statement of comprehensive income
C. statement of stockholders’ equity
D. retained earnings statement
