Question :
61.The following information related to the marketable security investments of : 1241894
61.The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2014, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
No. of Shares
Cost/Share
Total Cost
Value/Share
Total Market Value
AAA
100
$29
$2,900
$34
$3,400
BBB
250
30
7,500
28
7,000
CCC
150
16
2,400
20
3,000
$12,800
$13,400
Early in 2015, the company sold 50 shares of BBB for $26 per share. During 2015, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2015, were $24 and $18, respectively. During 2016, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entry to record the dividends received on the BBB securities and the dividends declared on the CCC stock in 2015 will include:
a.A credit to Dividend Revenue for $975.
b.A credit to Dividend Payable for $375.
c.A credit to Cash for $600.
d.A debit to Dividend Expense for $375.
62.The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2014, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
No. of Shares
Cost/Share
Total Cost
Value/Share
Total Market Value
AAA
100
$29
$2,900
$34
$3,400
BBB
250
30
7,500
28
7,000
CCC
150
16
2,400
20
3,000
$12,800
$13,400
Early in 2015, the company sold 50 shares of BBB for $26 per share. During 2015, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2015, were $24 and $18, respectively. During 2016, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entry to record the revaluation of BBB shares in 2015 is:
a.Trading Securities800
Unrealized Gain on Trading Securities800
b.Unrealized Loss on Trading Securities 800
Trading Securities800
c.Unrealized Loss on Trading Securities 600
Cash600
d.Trading Securities 800
Realized Gain on Trading Securities 800
63.The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2014, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
No. of Shares
Cost/Share
Total Cost
Value/Share
Total Market Value
AAA
100
$29
$2,900
$34
$3,400
BBB
250
30
7,500
28
7,000
CCC
150
16
2,400
20
3,000
$12,800
$13,400
During 2015, Solo received word that dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market value of CCC on December 31, 2015, was $18. During 2016, Solo sold 150 shares of CCC for $22 per share.
The journal entry to record the revaluation of CCC shares in 2015 is:
a.Available-for-Sale Securities300
Unrealized Gain on Available-for-Sale Securities300
b.Unrealized Price Increase on Available-for-Sale Securities300
Available-for-Sale Securities300
c.Realized Loss on Available-for-Sale Securities300
Available-for-Sale Securities300
d.Available-for-Sale Securities 400
Unrealized Price Increase on Available-for-Sale Securities400
64.The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2014, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
No. of Shares
Cost/Share
Total Cost
Value/Share
Total Market Value
AAA
100
$29
$2,900
$34
$3,400
BBB
250
30
7,500
28
7,000
CCC
150
16
2,400
20
3,000
$12,800
$13,400
Early in 2015, the company sold 50 shares of BBB for $26 per share. During 2015, Solo received dividends of $3 per share on the remaining 200 shares of BBB. The per-share market value of BBB on December 31, 2015, was $24. During 2016, Solo sold the remaining 200 shares of BBB stock for $26 per share.
The journal entry to record the sale of 200 shares of BBB stock in 2016 is:
a.Cash5,200
Trading Securities4,800
Unrealized Gain on Trading Securities400
b.Cash5,200
Unrealized Loss on Trading Securities400
Trading Securities4,800
c.Cash5,200
Trading Securities4,800
Realized Gain on Trading Securities400
d.Trading Securities6,000
Realized Gain on Trading Securities800
Cash5,200
65.The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2014, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
No. of Shares
Cost/Share
Total Cost
Value/Share
Total Market Value
AAA
100
$29
$2,900
$34
$3,400
BBB
250
30
7,500
28
7,000
CCC
150
16
2,400
20
3,000
$12,800
$13,400
During 2015, Solo received word that dividends of $$2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market value of CCC on December 31, 2015, was $18. During 2016, Solo sold 150 shares of CCC for $22 per share.
The journal entry to record the sale of 150 shares of CCC stock in 2016 would include:
a.A debit to Cash for $2,700.
b.A debit to Unrealized Price Increase on Available-for-Sale Securities for $300.
c.A debit to Unrealized Gain on Available-for-Sale Securities for $900.
d.A debit to Available-for-Sale Securities for $3,300.
66.Under GAAP, market values based on quoted prices in active markets for identical securities are called:
a.Level 1 measurements
b.Level 2 measurements
c.Level 3 measurements
d.None of the above
67.Under GAAP, market values based on less reliable, unobservable inputs for securities are called:
a.Level 1 measurements
b.Level 2 measurements
c.Level 3 measurements
d.None of the above
