Q22. Fiduciary had an investment in Portfolio A that had a market value of $7 million accounted for as available for sale. It had originally charged $3 million when Portfolio A was marked-to-market in the equity account on Fiduciary's balance sheet. Now, it has been determined that $1 million of the $3 million charge has been permanently impaired. Fiduciary should: A) reclassify $1 million by charging it against the income statement while recognizing a decrease (debit) to the equity section of the balance sheet. B) charge an additional $1 million against the income statement while recognizing an additional charge (debit) to the equity section of the balance sheet. C) reclassify $1 million by charging it against the income statement while recognizing an increase (credit) to the equity section of the balance sheet.
Q23. Mashburn Company acquired 25% of the 100,000 outstanding shares of Humm Co. on January 1 for $250,000 in cash. Humm Co. earned $1 per share and had a dividend payout ratio of 40%. As of December 31, Humm Co. shares were trading in the open market at $12 per share. Calculate the income statement treatment of the Humm Co. investment as of December 31.
A) $75,000. B) $25,000. C) $10,000.
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发表于 2009-1-8 10:24
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