,Fundamentals of Advanced Accounting 8th Hoyle Chapter
01
Version 1
1
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1)
Baker Company owns 15% of the common stock of Charlie Corporation and used the
fair-value method to account for this investment. Charlie reported net income of $120,000
for
2021 and paid dividends of $70,000 on October 1, 2021. How much income should Baker
recognize on this investment in 2021?
1) ______
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
AICPA : BB Critical Thinking
AICPA : FN Measurement
Learning Objective : 01-02 Describe in general the various methods of accounting for an
dr.j
,investment in
Gradable : automatic
Difficulty : 3 Hard
AACSB : Knowledge Application
Accessibility : Screen Reader Compatible
Topic : Accounting for Investments―Various Methods
2)
Loeffler Company owns 35% of the common stock of Tetter Co. and uses the equity
method to account for the investment. During 2021, Tetter reported income of $260,000
and paid
dividends of $90,000. There is no amortization associated with the investment. During
2021,
how much income should Loeffler recognize related to this investment?
2) ______
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
DOWNLOAD THE Test Bank for Fundamentals of Advanced Accounting 8th
Edition Hoyle
mynursytest.store
Fundamentals of Advanced Accounting 8th Hoyle Chapter
01
Version 1
dr.j
, 2
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
AICPA : BB Critical Thinking
AICPA : FN Measurement
Learning Objective : 01-04 Describe the financial reporting for equity method investments
and prepare
Gradable : automatic
Difficulty : 3 Hard
AACSB : Knowledge Application
Accessibility : Screen Reader Compatible
Topic : Equity Method―Basic Journal Entries
3)
On January 1, 2021, Lee Company paid $1,870,000 for 80,000 shares of Thomas Co.’s
voting common stock which represents a 45% investment. No allocation to goodwill or
other
specific account was necessary. Significant influence over Thomas was achieved by this
acquisition. Thomas distributed a dividend of $2.00 per share during 2021 and reported net
income of $720,000. What was the balance in the Investment in Thomas Co. account found
in the
financial records of Lee as of December 31, 2021?
3) ______
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
dr.j
01
Version 1
1
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1)
Baker Company owns 15% of the common stock of Charlie Corporation and used the
fair-value method to account for this investment. Charlie reported net income of $120,000
for
2021 and paid dividends of $70,000 on October 1, 2021. How much income should Baker
recognize on this investment in 2021?
1) ______
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
AICPA : BB Critical Thinking
AICPA : FN Measurement
Learning Objective : 01-02 Describe in general the various methods of accounting for an
dr.j
,investment in
Gradable : automatic
Difficulty : 3 Hard
AACSB : Knowledge Application
Accessibility : Screen Reader Compatible
Topic : Accounting for Investments―Various Methods
2)
Loeffler Company owns 35% of the common stock of Tetter Co. and uses the equity
method to account for the investment. During 2021, Tetter reported income of $260,000
and paid
dividends of $90,000. There is no amortization associated with the investment. During
2021,
how much income should Loeffler recognize related to this investment?
2) ______
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
DOWNLOAD THE Test Bank for Fundamentals of Advanced Accounting 8th
Edition Hoyle
mynursytest.store
Fundamentals of Advanced Accounting 8th Hoyle Chapter
01
Version 1
dr.j
, 2
Question Details
Accessibility : Keyboard Navigation
Bloom's : Apply
AICPA : BB Critical Thinking
AICPA : FN Measurement
Learning Objective : 01-04 Describe the financial reporting for equity method investments
and prepare
Gradable : automatic
Difficulty : 3 Hard
AACSB : Knowledge Application
Accessibility : Screen Reader Compatible
Topic : Equity Method―Basic Journal Entries
3)
On January 1, 2021, Lee Company paid $1,870,000 for 80,000 shares of Thomas Co.’s
voting common stock which represents a 45% investment. No allocation to goodwill or
other
specific account was necessary. Significant influence over Thomas was achieved by this
acquisition. Thomas distributed a dividend of $2.00 per share during 2021 and reported net
income of $720,000. What was the balance in the Investment in Thomas Co. account found
in the
financial records of Lee as of December 31, 2021?
3) ______
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
dr.j
