136. The following transactions occurred during the year for XYZ Corporation:
(a.) During the year, trading securities were purchased for $250,000.
(b.) During the year, securities available for sale were purchased for $80,000.
(c.) During the year, tradi
71. Zwick Company bought 28,000 shares of the voting common stock of Handy Corporation
in January 2011. In December, Hart announced $200,000 net income for 2011 and declared and
paid a cash dividend of $2 per share on the 200,000 shares of outstanding com
117. Wang Corporation purchased $100,000 of Hales Inc 6% bonds at par with the intent and
ability to hold the bonds until they matured in 2015, so Wang classifies its investment as held to
maturity. Unfortunately, a combination of problems at Hales and in
102. Gerken Company concluded at the beginning of 2011 that the company's ownership
interest in DillCo had increased to the point that it became appropriate to begin using the equity
method to account for the investment. The balance in the investment acco
95. On July 1, 2011, Tremen Corporation acquired 40% of the shares of Delany Company.
Tremen paid $3,000,000 for the investment, and that amount is exactly equal to 40% of the fair
value of identifiable net assets on Delany's balance sheet. Delany recogni
1.1 Latar Belakang
Manajemen strategi merupakan proses atau rangkaian kegiatan pengambilan
keputusan yang bersifat mendasar dan menyeluruh, disertai penetapan cara
melaksanakanya, yang dibuat oleh pimpinan dan diimplementasikan oleh selu
119. If the fair value of a held-to-maturity investment declines for a reason that is viewed as
"other than temporary" because the company has incurred a credit loss on the investment,
A. the investment is written down to fair value, and only the non-cred
121. When an impairment of an equity investment that is classified as available for sale occurs
for a reason that is judged to be "other than temporary," the investment is written down to its
fair value and the amount of the write-down is:
A. Recorded as
111. Which of the following is not true about the fair value option?
A. The fair value option is irrevocable.
B. The fair value option must be elected for all shares of an investment in a particular company.
C. Electing the fair value option for held-to-m
114. Under IFRS No. 9: which is not a category for accounting for investments?
A. Fair value through profit and loss.
B. Fair value through other comprehensive income.
D. Amortized cost.
AACSB: Reflective thinking, Diversity
109. Assume that, on 1/1/11, Sosa Enterprises paid $5,100,000 for its investment in 36,000
shares of Orioles Co. Further, assume that Orioles has 120,000 total shares of stock issued and
estimates an 8 year remaining useful life and straight-line deprecia
107. The amount of purchased goodwill is:
A. $18 million.
B. $30 million.
C. $60 million.
D. None of the above is correct.
Learning Objective: 12-06 Explain the adjustments made in the equity method when
106. On January 1, 2011, Green Corporation purchased 20% of the outstanding voting common
stock of Gold Company for $300,000. The book value of the acquired shares was $275,000.
The excess of cost over book value is attributable to an intangible asset on
123. If the fair value of a debt investment that is classified as an available-for-sale investment
declines for a reason that is viewed as "other than temporary" because it is viewed as "more
likely than not" that the investor will be required to sell the
125. Which of the following is NOT a reason to consider a decline in the fair value of a debt
investment to be "other than temporary"?
A. The investor determines that a credit loss exists on the investment.
B. The investor intends to sell the investment.
127. Assume that Nichols concludes that the Holly bonds are other-than-temporarily impaired
because Nichols believes it is more likely than not that it will have to sell the Taylor bonds
before the bonds have a chance to recover their fair value. Before-t
133. On January 1, 2011, Wildcat Company purchased $93,000 of 10% bonds at face value.
The bonds are to be held to maturity. The bonds pay interest semiannually on January 1, and
(1.) Prepare the appropriate journal entry to record the a
129. Dicker Furriers purchased one thousand shares of Loose Corporation stock on January 10,
2010, for $800 per share and classified the investment as securities available for sale. Loose's
market value was $400 per share on December 31, 2010, and the dec
135. FKG Inc. carries the following investments on its books at December 31, 2010, and
December 31, 2011. All securities were purchased during 2010.
(1.) Prepare the necessary journal entries for FKG on December 31, 2010, and December 31,
137. Jackson Company engaged in the following investment transactions during the current
Prepare the appropriate journal entries to record the transactions for the year including year-end
adjustments. Show calculations.
131. Which of the following is not true about derivatives?
A. Large losses on derivative investments have been reported in the press.
B. Derivatives are so named because their value is derived from some underlying measure.
C. Derivatives are useful instru
104. Cucumber Company concluded at the beginning of 2011 that the company's ownership
interest in PickelCo had decreased to the point that it became appropriate to begin accounting
for its investment as available for sale, rather than using the equity met
100. Sox Corporation purchased a 40% interest in Hack Corporation for $1,500,000 on Jan 1,
2011. On November 1, 2011, Hack declared and paid $1 million in dividends. On December 31,
Hack reported a net loss of $6 million for the year. What amount of loss
99. Hope Company bought 30% of Faith Corporation in 2011. 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 2011, Faith reported net income in the amount of $4
73. Jeremiah Corporation purchased securities during 2011 and classified them as securities
available for sale:
All declines are considered to be temporary. How much gain will be reported by Jeremiah
Corporation in the December 31, 2011, income statement
60. All investments in debt and equity securities that don't fit the definitions of the other
reporting categories are classified as:
A. Trading securities.
B. Securities available for sale.
C. Held-to-maturity securities.
D. Consolidated securities.
58. What is the effect on a company's cash flows and reported profit from accounting for an
investment as a trading security versus as an available-for-sale security?
A. Option A
B. Option B
C. Option C
D. Option D
AACSB: Reflective thinking
63. Accumulated Other Comprehensive Income in the shareholders' equity section of the
balance sheet reflects changes in the fair value of securities for which type of securities?
A. Securities available for sale.
B. Trading securities.
C. Consolidated sec
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