Advanced Accounting Unit 5 Practice Quiz

Advanced Accounting Unit 5 Practice Quiz - 1 award 0 out of...

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1. award: 0 out of 1.00 point Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow: 2013 2012 Cash $ 20,150 $ 10,150 Accounts receivable (net) 75,800 58,500 Merchandise inventory 101,350 60,750 Buildings and equipment (net) 77,000 95,000 Trademark 102,900 123,000 Totals $ 377,200 $ 347,400 Accounts payable $ 102,200 $ 85,500 Notes payable, long- term 0 28,900 Noncontrolling interest 67,400 55,400 Common stock, $10 par 200,000 200,000 Retained earnings (deficit) 7,600 (22,400) Totals $ 377,200 $ 347,400 Additional Information for Fiscal Year 2013 Iverson and Oakley’s consolidated net income was $54,000. Oakley paid $5,000 in dividends during the year. Iverson paid $11,000 in dividends. Oakley sold $15,000 worth of merchandise to Iverson during the year. There were no purchases or sales of long-term assets during the year. In the 2013 consolidated statement of cash flows for Iverson Company: Net cash flows from operating activities were rev: 12_09_2013_QC_41573 $50,900. $33,400. $3,100. $16,700.
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Cash flow from operations: Net income $ 54,000 Depreciatio n expense 18,000 Trademark amortization 20,100 Increase in accounts receivable (17,300) Increase in inventory (40,600) Increase in accounts payable 16,700 (3,100) Cash flow from operations $ 50,900 2. award: 0 out of 1.00 point Jordan, Inc., owns Fey Corporation. For the current year, Jordan reports net income (without consideration of its investment in Fey) of $283,000 and the subsidiary reports $103,500. The parent had a bond payable outstanding on January 1, with a book value of $226,500. The subsidiary acquired the bond on that date for $212,000. During the current year, Jordan reported interest expense of $36,790 while Fey reported interest income of $35,890. What is consolidated net income? rev: 12_09_2013_QC_41573 $372,900. $401,900. $400,100. $371,100. Jordan’s income from own operations $ 283,000 Fey's income 103,500 Eliminate intra- entity interest income (35,890) Eliminate intra- entity interest expense 36,790 Recognize retirement gain on 14,500
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debt ($226,500 − $212,000) Consolidated net income $ 401,900 3. award: 0 out of 1.00 point Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $353,750. Of this amount $308,000 was attributable to Mattoon’s controlling interest while the remaining $45,750 was attributable to the noncontrolling interest. Mattoon has 140,000 shares of common stock outstanding and Effingham has 30,500 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share? rev: 12_09_2013_QC_41573 $1.97 $2.20 $2.07 $2.53 Mattoon’s share of consolidated net income $ 308,000 Number of Mattoon common shares outstanding 140,000 Mattoon’s EPS = ($308,000 ÷ 140,000 shares) $ 2.20 4.
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