chapter13a

chapter13a - Chapter 13 1. Debt investments are initially...

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Unformatted text preview: Chapter 13 1. Debt investments are initially recorded at: A. cost. B. cost plus accr ued inter est. C. fair valu e. D. Non e of the abov e. 2. Hanes Company sells debt investments costing $26,000 for $28,000, plus accrued interest that has been recorded. In journalizing the sale, credits are to: A. Debt Inve stme nts and Loss on Sale of Debt Inve stme nts. B. Debt Inve stme nts, Gain on Sale of Debt Inve stme nts, and Bon d Inter est Rece ivabl e. C. Stoc k Inve stme nts and Bon d Inter est Rece ivabl e. D. No corre ct answ er give n. 3. Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost $39,500. This transaction will result in reporting in the income statement a: A. loss of $2,5 00 unde r Oth er expe nses and losse s. B. loss of $2,5 00 unde r Op erati ng expe nses. C. gain of $2,5 00 unde r Oth er reve nues and gain s. D. gain of $2,5 00 unde r Op erati ng reve nues. 4. The equity method of accounting for long-term investments in stock should be used when the investor has significant influence...
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This note was uploaded on 01/27/2010 for the course MGT 011A taught by Professor Hancock,john during the Spring '07 term at UC Davis.

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chapter13a - Chapter 13 1. Debt investments are initially...

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