Question : 111.On December 30, 2015, Varsity Corporation sold available for sale : 1237641

 

 

111.On December 30, 2015, Varsity Corporation sold available for sale marketable securities costing $800,000 for $860,000 cash. The securities were purchased on January 2, 2013 and the market value of the securities on December 31, 2013 and December 31, 2014 was $820,000 and $780,000, respectively. How much gain or loss will Varsity report in its income statement for the year ending December 31, 2015?   

A.A $20,000 loss.

 

B.A $40,000 gain.

 

C.A $60,000 gain.

 

D.An $80,000 gain.

 

 

 

 

112.Fisher Corporation invested $320,000 cash in available-for-sale marketable securities in early December. On December 31, the quoted market price for these securities is $337,000. Which of the following statements is correct?   

A.Fisher’s December income statement includes a $17,000 gain on investments.

 

B.If Fisher sells these investments on January 2 for $300,000, it will report a loss of $37,000.

 

C.Fisher’s December 31 balance sheet reports marketable securities at $320,000 and an unrealized holding gain on investments of $17,000.

 

D.Fisher’s December 31 balance sheet reports marketable securities at $337,000 and an unrealized holding gain on investments of $17,000.

 

 

 

 

On October 12, 2014, Neptune Corporation invested $700,000 in short-term available-for-sale marketable securities. The market value of this investment was $730,000 at December 31, 2014, but had slipped to $725,000 by December 31, 2015.

 

113.Refer to the information above. In financial statements prepared on December 31, 2014, Neptune Corporation reports:   

A.The asset Investments in Marketable Securities at $700,000 with footnote disclosure of the market value of $730,000.

 

B.The asset Investments in Marketable Securities at $730,000, and a $30,000 Unrealized Holding Gain included in total stockholders’ equity.

 

C.The asset Investments in Marketable Securities at $730,000, and a $30,000 gain recognized in the income statement.

 

D.The asset Investments in Marketable Securities at $700,000, and a $30,000 Unrealized Holding Gain included in total stockholders’ equity.

 

 

 

 

114.Refer to the information above. Assuming Neptune does not sell this investment, the fair value accounting adjustment necessary at December 31, 2015, includes:   

A.A $5,000 debit to Unrealized Holding Gain on Investments.

 

B.A $25,000 credit to Unrealized Holding Gain on Investments.

 

C.A $5,000 debit to Investments in Marketable Securities.

 

D.A $725,000 debit to Investments in Marketable Securities.

 

 

 

 

115.Refer to the information above. Assuming Neptune does not sell this investment, the financial statements prepared at December 31, 2015 will report:   

A.Investments in Marketable Securities of $700,000, reduced by a $30,000 Unrealized Holding Gain on Investments, in the asset section of the balance sheet.

 

B.The asset Investments in Marketable Securities of $700,000 in the balance sheet, and a $25,000 Unrealized Holding Loss on Investments in the income statement.

 

C.The asset Investments in Marketable Securities of $725,000, and a $5,000 Unrealized Holding Loss deducted from total stockholders’ equity.

 

D.Investment in Marketable Securities of $725,000 in the asset section of the balance sheet, with a $25,000 Unrealized Holding Gain on Investments included in the stockholders’ equity section.

 

 

 

 

116.Effective internal control over accounts receivable ensures:   

A.That credit is only extended to customers that meet the company’s credit standards.

 

B.That an approved factor is used when the company sells its accounts receivable.

 

C.There is an accurate accounting for cash receipts, cash disbursements, and cash balances.

 

D.The availability of adequate cash for conducting business operations.

 

 

 

 

117.Effective internal control over accounts receivable ensures all of the following except:   

A.All shipments of goods during the period are recorded.

 

B.The sale transaction is recorded for the correct dollar amount.

 

C.That cash collections from customers are promptly deposited.

 

D.The availability of adequate cash for conducting business operations.

 

 

 

 

118.Effective internal control includes all the following steps except:   

A.The Customer Order department prepares a sales order upon receipt of an order.

 

B.The Billing department compares what was shipped with what was ordered and prepares and mails a sales invoice.

 

C.The Accounting department receives the checks and the mailroom listing of checks received and prepares the daily bank deposit.

 

D.The Accounting department reconciles the bank statement with accounting records.

 

 

 

 

119.The _______________ department compares what was shipped with what was ordered and prepares and mails an invoice.   

A.Customer Order

 

B.Billing

 

C.Accounting

 

D.Credit

 

 

 

 

120.The _______________ department ensures that the goods shipped match those ordered by the customer.   

A.Customer Order

 

B.Billing

 

C.Accounting

 

D.Shipping