ACCT 551 Week 7 Quiz (Multiple Practice Versions)

ACCT 551 Week 7 Quiz → Winter 2017

1. Question (TCO B) Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.
2. Question (TCO B) On October 1, 2010, Menke Co. purchased (to hold to maturity) 200, $1,000, 9% bonds for $208,000. An additional $6,000 was paid for accrued interest……… bonds mature on December 1, 2014. Menke uses straight-line amortization. Ignoring income taxes, the amount reported in Menke’s 2010 income statement from this investment should be
3. Question (TCO B) On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account. There was no change during 2011 in the composition of Calhoun’s portfolio of marketable equity securities held as available-for-sale securities. The following information pertains to that portfolio:
4. Question (TCO B) On December 31, 2010, Jeter Corp. had the following equity securities that were purchased during 2010, its first year of operation:
5. Question (TCO B) Which of the following statements regarding the accounting for held-to-maturity securities is incorrect?
   • To classify an investment as held-to-maturity, the company must have either the intent or the ability to hold the security until maturity.
   • If a debt security is purchased at par value, it will be valued and reported at the purchase price until it matures.
   • A held-to-maturity security can be reported as either a current or a non-current liability.

Play Video

Name: Jennifer Lucas
Status: Online ⬤
Classes Taken: 3878
Ratings: ⭐⭐⭐⭐⭐

Hire Me

STATUS

ACCT 551 Week 7 Quiz → Summer 2017

1. Question : (TCO B) Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.
2. Question : (TCO B) During 2008, Hauke Co. purchased two thousand $1,000, 9% bonds. The carrying value of the bonds at December 31, 2010 was $1,960,000. The bonds mature on March 1, 2015, and pay interest on March 1 and September 1……….. Hauke uses straight-line amortization. The gain on the sale is
3. Question : (TCO B) On January 2, 2010, Pod Company purchased 25% of the outstanding common stock of Jobs, Inc. and subsequently used the equity method to account for the investment. During 2010, Jobs, Inc. reported net income of $420,000 and distributed dividends of $180,000. The ending balance in the Investment in Pod Company account at December 31, 2010 was $320,000 after applying the equity method during 2010. What was the purchase price Pod Company paid for its investment in Jobs, Inc?
4. Question : (TCO B) On December 31, 2010, Jeter Corp. had the following equity securities that were purchased during 2010, its first year of operation:
5. Question : (TCO B) On January 1, 2010, Reston Co. purchased 25% of Ace Corp.’s common stock; no goodwill resulted from the purchase. Reston appropriately carries this investment at equity, and the balance in Reston’s investment account was $720,000 at December 31, 2010. Ace reported net income of $450,000 for the year ended December 31, 2010, and paid common stock dividends totaling $180,000 during 2010. How much did Reston pay for its 25% interest in Ace?

ACCT 551 Week 7 Quiz → Summer 2016

1. Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2011, Patton Company should report interest revenue from the Scott Co. bonds of
2. (TCO B)On October 1, 2010, Menke Co. purchased (to hold to maturity) 200, $1,000, 9% bonds for $208,000……….. December 1, 2014. Menke uses straight-line amortization. Ignoring income taxes, the amount reported in Menke’s 2010 income statement from this investment should be
3. (TCO B) On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account…………… Calhoun’s stockholders’ equity section of the balance sheet at December 31, 2011?
4. (TCO B) On December 29, 2011, James Co. sold an equity security that had been purchased on January 4, 2010. James owned no other equity securities……… in the 2011 income statement. Was the equity security classified as available for sale, and did its 2010 market price decline exceed its 2011 market price recovery?
5. (TCO B) Rich, Inc. acquired 30% of Doane Corp.’s voting stock on January 1, 2010 for $400,000. During 2010, Doane earned $160,000 and paid dividends of $100,000. Rich’s 30% interest in Doane gives Rich the ability to exercise significant influence over Doane’s operating and financial policies. During 2011, Doane earned $200,000 and paid dividends of $60,000 on April 1 and $60,000 on October 1. On July 1, 2011, Rich sold half of its stock in Doane for $264,000 cash. What should be the gain on sale of this investment in Rich’s 2011 income statement?