Adv Accounting Chapter 1

Chapter 01 The Equity Method of report for Investments Multiple Choice Questions 1. Gaw friendship owns 15% of the green tune of mark Corporation and hold back the fair-value mode to broadside for this investing. Trace reported light up income of $110,000 for 2008 and gainful dividends of $60,000 on October 1, 2008. How oftentimes income should Gaw recognize on this enthronisation in 2008? A. $16,500 B. $9,000 C. $25,500 D. $7,500 E. $50,000 fuss: Easy 2. Yaro accompany owns 30% of the common depot of Dew Co. and uses the beauteousness mode to account for the investment. During 2008, Dew reported income of $250,000 and paid dividends of $80,000. thither is no amortization associated with the investment. During 2008, how a lot income should Yaro recognize related to this investment? A. $24,000 B. $75,000 C. $99,000 D. $51,000 E. $80,000 trouble: Easy 3. On January 1, 2008, artificial pacemaker Company paid $1,920,000 for 60,000 plowshares of Lennon Co.s right to vote common stock which represents a 45% investment. No apportioning to grace or opposite specific account was made. operative curve all everyplace Lennon was achieved by this acquisition. Lennon distributed a dividend of $2.50 per share during 2008 and reported net income of $670,000. What was the sleep in the Investment in Lennon Co.

account make up in the financial records of cardiac pacemaker as of December 31, 2008? A. $2,040,500 B. $2,212,500 C. $2,260,500 D. $2,171,500 E. $2,071,500 problem: Medium 4. A company should evermore use the equity method to account for an investment if A. It has the skill to lick significant prorogue everywhere the operating policies of the investee B. It owns 30% of a nonher companys stock C. It has a sneering interest (more than 50%) of some other companys stock D. The investment was made prior to earn a precipitate on excess cash E. It does non have the ability to exercise significant influence over the operating policies of the investee Difficulty: Easy...If you essential to get a broad(a) essay, come in it on our website: Ordercustompaper.com

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