题目内容

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.

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.

On January 1, 2014, Benson Corporation paid $800,000 to purchase 40% of the outstanding stock of Kroger Company. Kroger Company reported net income of $200,000 for the year ending December 31, 2014 and paid cash dividends of $60,000 during 2014. On January 1, 2015, Benson Corporation sells its entire investment in Kroger Company for $1,100,000. Benson Corporation will report a(n):

A.realized gain on the sale of $300,000.
B.unrealized gain on the sale of $300,000.
C.realized gain on the sale of $244,000.
D.unrealized gain on the sale of $244,000.

The Ashley Corporation purchased $600,000 of 4%, 5-year bonds at 97 on January 1, 2014. Interest is to be paid semiannually on January 1 and July 1. This is a held-to-maturity investment. This company uses the straight-line method to amortize any premiums or discounts. What was the purchase price of these bonds?

A. $600,000
B. $540,000
C. $582,000
D. $618,000

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