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Exam 15: Investments and International Operations

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Question 61

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Long-term investments in available-for-sale securities are reported at market value on the balance sheet.

A) True
B) False

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Question 62

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________________________ refers to all changes in equity for a period except for those due to investments and distributions to owners.

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Question 63

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Unrealized gains and losses on trading securities are reported as part of net income.

__________________________ are investments in securities that are not readily convertible to cash or are not intended to be converted to cash in the short-term.

Texana Inc.imports inventory from Mexico.Prepare the journal entries for Texana to record the following transactions.Include any year-end adjustments.

Haladam Company had the following transactions relating to investments in trading securities during the year.Prepare the required general journal entries for these transactions.

Accounting for long-term investments in equity securities with controlling influence uses the:

If a long-term investment in an equity security gives the investor significant influence over the investee,the investment is classified as available-for-sale.

Doherty Corporation had net income of $30,000,net sales of $1,000,000,and average total assets of $500,000.Its return on total assets is equal to:

Acme owns 4,000 shares of XYZ.XYZ has 50,000 total shares of stock outstanding.XYZ paid $0.82 per share in cash dividends to its stockholders.Acme should record a:

A company reported net income of $275,000,net sales of $2,500,000,and average total assets of $2,100,000 for the current year.Calculate this company's profit margin,total asset turnover,and return on total assets.

Management's intent and the marketability of a security determine whether or not a security is classified as a long-term or short-term investment.

A company paid $500,000 for 12% bonds with a par value of $500,000.The bonds pay 6% interest semiannually on September 1 and March 1.The company intends to hold the bonds until they mature.Prepare the journal entries for the following dates and transactions related to this bond acquisition. (1) Bonds purchased on September 1,2012. (2) Year-end adjusting entry,December 31,2012. (3) Receipt of semiannual interest March 1,2013. (4) Redemption of the bonds at maturity on August 31,2019.

A company reported net income for 2012 of $98,000 and $106,000 in 2013.It also reported net sales of $735,000 in 2012 and $798,000 in 2013.The company's average total assets in 2012 were $1,850,000 and $1,720,000 in 2013.Calculate this company's profit margin,total asset turnover,and return on total assets for 2012 and 2013.Comment on the results.

A controlling investor is referred to as the parent and the investee company is referred to as the subsidiary.

The price of one currency stated in terms of another currency is called a(n) :

Return on total assets measures a company's ability to:

Multinational corporations can be U.S.companies with operations in other countries.

When using the equity method,receipt of cash dividends increases the carrying value of an investment in equity securities.

Management's intent determines whether an available-for-sale security is classified as long term or short term.