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Unformatted text preview: assets on Delany's balance sheet. Delany recognized net income of $1,000,000 for 2013, and paid $150,000 quarterly dividends to its shareholders. After all closing entries are made, Tremen's "Investment in Delany Company" account would have a balance of: A. $3,200,000. B. $3,160,000. C. $3,000,000. D. $3,080,000. 89. Which of the following is not true about accounting for investments under IAS No. 31 under IFRS? A. IFRS allows proportionate consolidation of investments where two or more investors have joint control. B. IFRS is more restrictive than U.S. GAAP concerning when an investor can elect the fair value option. C IFRS requires that the accounting policies of an investee be adjusted to correspond to those of the . investor when applying the equity method. D. IFRS does not allow use of the equity method where two or more investors have joint control. 90. Bloomfield Bakers accounts for its investment in Clor Confectionary under the equity method. Bloomfield carried the Clor investment at $150,000 and $165,000 at December 31, 2012 and 2013, respectively. During 2013 Clor recognized $80,000 of net income and paid dividends of $30,000. Assuming that Bloomfield owned the same percentage of Clor throughout 2013, their percentage ownership must have been: A. 15%. B. 18.75%. C. 30%. D. 50%. 91. Jack Corporation purchased a 20% interest in Jill Corporation for $1,500,000 on January 1, 2013. Jack can significantly influence Jill. On December 10, 2013, Jill declared and paid $1 million in dividends. Jill reported a net loss of $6 million for the year. What amount of loss should Jack report in its income statement for 2013 relative to its investment in Jill? A. $1,000,000. B. $1,200,000. C. $1,400,000. D. $1,500,000. 92. Hope Company bought 30% of Faith Corporation in the beginning of 2013. Hope's purchase price equaled 30% of the book value of Faith's net identifiable assets, which also equaled 30% of the fair value of Faith. During 2013, Faith reported net income in the amount of $4,000,000 and declared an...
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This document was uploaded on 07/05/2013.

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