Question :
130.All of the following statements regarding accounting for trading securities : 1258217
130.All of the following statements regarding accounting for trading securities under U.S. GAAP are true except:
A. The entire portfolio of trading securities is reported at is fair value.
B. An unrealized gain or loss from a change in fair value is reported on the income statement.
C. An unrealized gain or loss is recorded with an adjusting entry when the securities are sold.
D. An unrealized gain or loss is recorded with an adjusting entry at the end of each period.
E. Unrealized gains and losses are recorded in a temporary account that is closed to Income Summary at the end of the period.
131.All of the following statements regarding accounting for trading securities under U.S. GAAP are true except:
A. The entire portfolio of trading securities is reported at fair value.
B. An unrealized gain or loss from a change in fair value is reported on the income statement.
C. A realized gain or loss is recorded when the securities are sold and reported on the income statement.
D. When the period-end fair value adjustment for the portfolio of trading securities is computed, it includes the cost and fair value of any securities sold.
E. Any prior period fair value adjustment to the portfolio is not used to compute the gain or loss from sale of individual transactions.
132.All of the following statements regarding other comprehensive income are true except:
A. Other comprehensive income includes unrealized gains and losses on available-for-sale securities.
B. Other comprehensive income is not considered when calculating comprehensive income.
C. Other comprehensive income includes foreign currency adjustments.
D. Other comprehensive income includes pension adjustments.
E. Accumulated other comprehensive income is defined as the cumulative impact of other comprehensive income.
133.Landmark Corp. buys $300,000 of Schroeter Company’s 8% five-year bonds at par value on September 1. Interest payments are made semiannually. All of the following regarding accounting for the securities are true except:
A. The debt securities should be recorded at the cost $300,000.
B. The securities will have a maturity value of $300,000.
C. The semiannual interest payment amount is $12,000.
D. The semiannual interest payment amount is $24,000.
E. Interest Revenue should be credited when an interest payment is received.
134.Landmark Corp. buys $300,000 of Schroeter Company’s 8% five-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the five year life. The journal entry to record the purchase should include:
A. A debit to Long-Term Investments-AFS $300,000.
B. A debit to Short-Term Investments-Trading $300,000.
C. A debit to Long-Term Investments-HTM $300,000.
D. A debit to Short-Term Investments-AFS $300,000.
E. A debit to Cash $300,000.
135.Landmark buys $300,000 of Schroeter Company’s 8% five-year bonds payable at par value on September 1. Interest payments are made semiannually on March 1 and September 1. The journal entry Landmark should record to accrue interest earned at year-end December 31 is:
A. Debit Interest Receivable $8,000, credit Interest Revenue $8,000.
B. Debit Interest Receivable $12,000, credit Interest Revenue $12,000.
C. Debit Cash $8,000, credit Interest Revenue $8,000.
D. Debit Cash $12,000, credit Interest Revenue $12,000.
E. Debit Interest Revenue $8,000, credit Interest Receivable $8,000.
136.Landmark Corp. buys $300,000 of Schroeter Company’s 8% five-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the five year life. When the bonds mature, the journal entry to record the proceeds will be:
A. Debit Long-Term Investments-HTM $300,000; credit Cash $300,000.
B. Debit Cash $300,000; credit Interest Revenue $300,000.
C. Debit Cash $300,000; credit Long-Term Investments-HTM $300,000.
D. Debit Cash $300,000; credit Interest Receivable $300,000.
E. Debit Cash $300,000; credit Bonds Payable $300,000.
137.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel received the dividend on April 15 and ultimately sells half of the Marcelo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The journal entry to record the purchase on February 15 is:
A. Debit Long-Term Investments-HTM $199,710; credit Cash $199,710.
B. Debit Long-Term Investments-AFS $199,710; credit Cash $199,710.
C. Debit Long-Term Investments-Trading $199,710; credit Cash $199,710.
D. Debit Long-Term Investments-Trading $200,110; credit Cash $200,110.
E. Debit Long-Term Investments-AFS $200,110; credit Cash $200,110.
138.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The journal entry to record the dividend on April 15 is:
A. Debit Cash $7,350; credit Dividend Revenue $7,350.
B. Debit Cash $8,050; credit Dividend Revenue $8,050.
C. Debit Cash $8,050; credit Interest Revenue $8,050.
D. Debit Cash $7,350; credit Interest Revenue $7,350.
E. Debit Cash $8,050; credit Gain on Sale of Investments $8,050.
7,000 * $1.15 = $8,050
139.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The journal entry to record the sale of the 3,500 shares of stock on November 17 is:
A. Debit Cash $102,300; credit Long-Term Investments-AFS $99,855; credit Gain on Sale of Long-Term Investments $2,445.
B. Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; debit Gain on Sale of Long-Term Investments $2,645.
C. Debit Cash $102,550; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,495.
D. Debit Cash $102,300; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,245.
E. Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; credit Gain on Sale of Long-Term Investments $2,645.
140.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The fair value of the remaining shares is $29.50 per share. The amount that Jewel Company should report on its year-end December 31 income statement related to the investment in Marcelo Corp. is:
A. $10,295.
B. $8,050.
C. $2,245.
D. $3,195.
E. $5,440.
141.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The fair value of the remaining shares is $29.50 per share. The amount that Jewel Company should report in the equity section of its year-end December 31 balance sheet for its investment in Marcelo Corp. is:
A. $10,295.
B. $8,050.
C. $2,245.
D. $3,195.
E. $6,390.
142.On February 15, Jewel Company buys 7,000 shares of Marcelo Corp. common at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.15 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The fair value of the remaining 3,500 shares is $29.50 per share. The amount that Jewel Company should report in the asset section of its year-end December 31 balance sheet for its investment in Marcelo Corp. is:
A. $200,110.
B. $103,250.
C. $2,245.
D. $3,195.
E. $5,440.
3,500 shares * $29.50 = $103,250
143.Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent company’s control, including all subsidiaries are known as:
A. Combined financial statements
B. Consolidated financial statements
C. Equity financial statements
D. Statement of owner’s equity
E. Investor financial statements
144.The two business entities involved in an investment in securities with controlling influence, for which consolidated financial statements are prepared, are known as:
A. Parent and Investor
B. Subsidiary and Investee
C. Consolidator and Parent
D. Parent and Subsidiary
E. Both are referred to as partners.