Ch 17 - Name: Status : Score: Instructions: Test...

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Name: Test Investments --- Stec Status : Completed Score: 180 out of 200 points Instructions: Question 1 Multiple Choice 10 of 10 points Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are included as other comprehensive income and as a separate component of stockholders' equity are Selected Answer: available-for-sale debt securities. Question 2 Multiple Choice 10 of 10 points Under the fair value method, the investor reports as revenue its share of the net income reported by the investee. Selected Answer: False Question 3 Multiple Choice 10 of 10 points On November 1, 2007, Morton Co. purchased Gomez, Inc., 10-year, 9%, bonds with a face value of $250,000, for $225,000. An additional $7,500 was paid for the accrued interest. Interest is payable semiannually on January 1 and July 1. The bonds mature on July 1, 2014. Morton uses the straight-line method of amortization. Ignoring income taxes, the amount reported in Morton's 2007 income statement as a result of Morton's available-for-sale investment in Gomez was Selected Answer: $4,375. Question 4 Multiple Choice 10 of 10 points Debt securities include corporate bonds and convertible debt, but not U.S. government securities. Selected Answer: False Question 5 Multiple Choice 10 of 10 points On its December 31, 2007 balance sheet, Klugman Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account. There was no change during 2008 in the composition of Klugman's portfolio of
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Ch 17 - Name: Status : Score: Instructions: Test...

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