题目内容

When an investor owns between 20% and 50% of the outstanding stock of another company, the ________ method is used to account for the stock investment.

A.fair value
B.equity
C.consolidated
D.available-for-sale

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Wolverine Corporation owns 29% of Buckeye Corporation. Net income for Buckeye for the year is $250,000. The journal entry prepared by Wolverine Corporation is:

A.debit Equity-Method Investment for $72,500 and credit Cash for $72,500.
B.debit Equity-Method Investment for $72,500 and credit Equity-Method Investment Revenue for $72,500.
C.debit Cash for $72,500 and credit Equity-Method Investment for $72,500.
D.debit Equity-Method Investment for $250,000 and credit Equity-Method Investment Revenue for $250,000.

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Under the equity method of accounting for long-term investments in common stock, when a cash dividend is received from the investee company:

A.the investor's Equity-Method Investment account is increased.
B.the Dividend Revenue account is increased.
C.the investor's Equity-Method Investment account is decreased.
D.no entry is necessary.

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Acme Company owns 35% of Superior Company. Superior Company paid $35,000 cash dividends for the year. Acme Company's journal entry to record the dividends includes a:

A.credit to Equity-Method Investments for $12,250.
B.credit to Equity-Method Investments for $35,000.
C.credit to Dividend Revenue for $12,250.
D.credit to Dividend Revenue for $35,000.

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On January 1, 2015, Barry Corporation paid $800,000 for 100,000 shares of Oak Company's common stock, which represents 40% of Oak's outstanding common stock. For the year ending December 31, 2015, Oak reported net income of $200,000 and paid cash dividends of $60,000. Barry should report the investment in Oak Company on its balance sheet at December 31, 2015 at:

A.$800,000.
B.$744,000.
C.$824,000.
D.$856,000.

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When an investor owns between 20% and 50% of the outstanding stock of another company, the ________ method is used to account for the stock investment.

A.fair value B.equity C.consolidated D.available-for-sale

Wolverine Corporation owns 29% of Buckeye Corporation. Net income for Buckeye for the year is $250,000. The journal entry prepared by Wolverine Corporation is:

Under the equity method of accounting for long-term investments in common stock, when a cash dividend is received from the investee company:

Acme Company owns 35% of Superior Company. Superior Company paid $35,000 cash dividends for the year. Acme Company's journal entry to record the dividends includes a:

A.fair value
B.equity
C.consolidated
D.available-for-sale