Q11. Milburne Company purchased 1,000 shares of Marino Co. for $20 per share on January 1. By December 31, shares of Marino were trading at $15 per share in the open market. Marino Co. has 100,000 shares outstanding with a dividend yield of 2% at year end. Milburne plans to hold the shares of Marino for longer-term investment and liquidity purposes. The impact of the Marino holding on the Milburne income statement is:
A) -$4,700. B) $300. C) -$5,000.
Q12. Milburne Company purchased 1,000 shares of Marino Co. for $20 per share on January 1. By December 31, shares of Marino were trading at $15 per share in the open market. Marino Co. has 100,000 shares outstanding with a dividend yield of 2% at year end. Milburne plans to hold the shares of Marino for near-term trading purposes. The impact of the Marino holding on the Milburne income statement is:
A) -$4,700. B) -$5,000. C) $300.
Q13. Smith Co. purchased 100 shares of Jones Co. for $40 per share on January 1. By December 31 of the same year, the valuation of Jones Co. had fallen to $30 per share. Which of the following represents the balance sheet valuation of Smith Co's investment in Jones at the end of the year? Jones Co's equity does not trade on an organized exchange.
A) $3,000. B) $4,000. C) Cannot be determined because Jones Co's shares do not trade on an organized exchange.
Q14. Two equity securities were purchased by Company XYZ in 1999 for $1,000. The market value of these securities rose to $1,350 by the end of 2000. If these securities were accounted for under SFAS 115 as Trading Securities, which of the following correctly describes their treatment on the balance sheet prior to posting the results of the income statement to the balance sheet?
A) The valuation of the "Marketable Securities" account on the assets side of the balance sheet will rise by $350. B) The valuation of the "Marketable Securities" account on the assets side of the balance sheet will remain unchanged. C) The equity of the firm will rise by $350.
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发表于 2009-1-8 10:19
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