Q27. If Prudhomme Inc. had purchased 750,000 shares of Quality for cash at a 10% discount from market value on December 31, 2003 and considered its shares of Quality to be available for sale, what would be the minority interest on the December 31, 2004 balance sheet? A) $450,000. B) $525,000. C) $250,000.
Q28. Assume Prudhomme's only investment in Quality was the purchase of 500,000 shares of Quality for cash at market value on December 31, 2003 and Prudhomme considers its shares of Quality to be available for sale. On December 31, 2004, Quality declares bankruptcy and Quality's stock price tumbles to $0.10 per share. What is the value of Quality on the balance sheet of Prudhomme as of December 31, 2004? A) $500,000. B) $50,000. C) $0.
Q29. Getry Corporation has just made an intercorporate investment in another company’s securities and will use the cost method of accounting to record the transaction. When using the cost method of accounting, which of the following is NOT done? A) A change in the market value of the securities, whether realized or unrealized, is reported in the income statement. B) The premium or discount on debt securities is amortized over the life of the issue. C) If the parent company determines the investment value is permanently impaired, even though the security is not sold, the value is written down and the loss is recognized.
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发表于 2009-1-7 15:46
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