Q6. Which of the following methods of accounting for investments will reflect the highest net income on a company’s income statement? A) Consolidation method. B) Equity method. C) Both methods report the same net income.
Q7. A company reports an intercorporate investment using the consolidation method. Which of the following statements is most
accurate? A) The use of the consolidation method by a company will generally report the most favorable results. B) The use of the consolidation method by a company will generally report the least favorable results. C) The use of the proportionate consolidation method by a company will generally report the most favorable results.
Q8. Carter Schmitz purchased 200 shares of Intelismart at $21 a share in June 2006 and intends to actively trade 80 shares in the near future and hold the remaining 120 shares as available for sale securities. Intelismart's closing price was $26 on December 31, 2006, and Schmitz did not sell any of its shares. What amount should Schmitz report on this investment under the income statement? A) $400. B) $1,000. C) $600.
Q9. The Anderson Company acquired 100,000 shares of the Birschbach Company on January 1, 2000, at $25 per share. The market price of a share of Birschbach stock on December 31, 2000, was $35 per share. During 2000, Birschbach paid dividends of $1.50 per share and had earnings of $2.50 per share. If the Anderson Company accounts for the Birschbach shares as trading securities, the carrying amount of these shares on Anderson's balance sheet at the end of 2000 is:
A) $2.6 million. B) $2.5 million. C) $3.5 million.
Q10. If Anderson Company accounts for the Birschbach Company shares as securities available-for-sale, the carrying amount of these shares on Anderson's balance sheet at the end of 2000 is:
A) $2.6 million. B) $2.5 million. C) $3.5 million.
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发表于 2009-1-7 16:00
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