DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
Correct answers are located at the 2nd half this document
p p p p p p p p p
MULTIPLEpCHOICEp-
pChooseptheponepalternativepthatpbestpcompletespthepstatementporpanswerspthepquestion.
1) BakerpCompanypownsp15%pofpthepcommonpstockpofpCharliepCorporationpandpusedpthepf
air-
valuepmethodptopaccountpforpthispinvestment.pCharliepreportedpnetpincomepofp$120,000pforp2021p
andppaidpdividendspofp$70,000ponpOctoberp1,p2021.pHowpmuchpincomepshouldpBakerprecognize
ponpthispinvestmentpinp2021?
1) p
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
02pDescribepinpgeneralpthepvariouspmethodspofpaccountingpforpanpinvestmentpinpGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatible
Topicp:pAccountingpforpInvestments―VariouspMethods
2) LoefflerpCompanypownsp35%pofpthepcommonpstockpofpTetterpCo.pandpusespthepequitypmeth
odptopaccountpforpthepinvestment.pDuringp2021,pTetterpreportedpincomepofp$260,000pandppaidpdivide
ndspofp$90,000.pTherepispnopamortizationpassociatedpwithpthepinvestment.pDuringp2021,p howpmuchp
incomepshouldpLoefflerprecognizeprelatedptopthispinvestment?
2)p
Versionp1 1
mynursytest.store
,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
04pDescribepthepfinancialpreportingpforpequitypmethodpinvestmentspandppreparepGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatiblepTopicp:pEquityp
Method―BasicpJournalpEntries
3) OnpJanuaryp1,p2021,pLeepCompanyppaidp$1,870,000pforp80,000psharespofpThomaspCo.’spvot
ingpcommonpstockpwhichprepresentspap45%pinvestment.pNopallocationptopgoodwillporpotherpspecific
paccountpwaspnecessary.pSignificantpinfluencepoverpThomaspwaspachievedpbypthispacquisition.pTho
maspdistributedpapdividendpofp$2.00pperpsharepduringp2021pandpreportedpnetpincomepofp$720,000.p
WhatpwaspthepbalancepinpthepInvestmentpinpThomaspCo.paccountpfoundpinpthepfinancialprecordspofpLe
epaspofpDecemberp31,p2021?
3)p
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
Versionp1 2
mynursytest.store
,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
04pDescribepthepfinancialpreportingpforpequitypmethodpinvestmentspandppreparepGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatible
Topicp:pEquitypMethod―InvestmentpAccountpBalance
4) Apnecessarypconditionptopusepthepequitypmethodpofpreportingpforpanpequitypinvestmentpispt
hatpthepinvestorpcompanypmust
4)p
A) havepthepabilityptopexercisepsignificantpinfluencepoverpthepoperatingpandpfinancialp
policiespofpthepinvestee.
B) ownpatpleastp30%pofpthepinvestee'spvotingpstock.
C) possesspapcontrollingpinterestpinpthepinvestee'spvotingpstock.
D) notphavepthepabilityptopexercisepsignificantpinfluencepoverpthepoperatingpandpfinancialp
policiespofpthepinvestee.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
Bloom'sp:pRemember
AACSBp:pReflectivepThinking
LearningpObjectivep:p01-
03pIdentifypthepsolepcriterionpforpapplyingpthepequitypmethodpofpaccountingpapGradablep:pautomatic
Difficultyp:p1pEasy
Accessibilityp:pScreenpReaderpCompatible
Topicp:pEquitypMethod―SignificantpInfluencepCriterion
Versionp1 3
mynursytest.store
, DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
5) OnpJanuaryp1,p2019,pDermotpCompanyppurchasedp15%pofpthepvotingpcommonpstockpofpH
ornepCorp.pOnpJanuaryp1,p2021,pDermotppurchasedp28%pofpHorne’spvotingpcommonpstock.pIfpDe
rmotpachievespsignificantpinfluencepwithpthispnewpinvestment,phowpmustpDermotpaccountpforpthep
changeptopthepequitypmethod?
5)p
A) Itpmustpusepthepequitypmethodpforp2021pbutpshouldpmakepnopchangespinpitspfinancialps
tatementspforp2020pandp2019.
B) Itpshouldppreparepconsolidatedpfinancialpstatementspforp2021.
C) Itpmustprestatepthepfinancialpstatementspforp2020pandp2019paspifpthepequitypmethodphadpb
eenpusedpforpthoseptwopyears.
D) Itpshouldprecordpappriorpperiodpadjustmentpatpthepbeginningpofp2021pbutpshouldpnotpr
estatepthepfinancialpstatementspforp2020pandp2019.
E) Itpmustprestatepthepfinancialpstatementspforp2020paspifpthepequitypmethodphadpbeenpu
sedpthen.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
Bloom'sp:pUnderstand
LearningpObjectivep:p01-
06apUnderstandpthepfinancialpreportingpconsequencespforpapchangeptopthepequitpGradablep:pautomatic
Difficultyp:p2pMediumpAACS
Bp:pAnalyticalpThinking
Topicp:pReportpChangeptopEquitypMethodpAcc
essibilityp:pScreenpReaderpCompatible
6) DuringpJanuaryp2020,pNelson,pInc.pacquiredp30%pofpthepoutstandingpcommonpstockpofp
FuelpCo.pforp$1,600,000.pThispinvestmentpgavepNelsonpthepabilityptopexercisepsignificantpinflue
ncepoverpFuel.pFuel’spassetsponpthatpdatepwereprecordedpatp$7,200,000pwithpliabilitiespof
$3,400,000.pAnypexcesspofpcostpoverpbookpvaluepofpNelson’spinvestmentpwaspattributedptopu
nrecordedppatentsphavingpapremainingpusefulplifepofptenpyears.
Inp2020,pFuelpreportedpnetpincomepofp$650,000.pForp2021,pFuelpreportedpnetpincomepof
$800,000.pDividendspofp$250,000pwereppaidpinpeachpofptheseptwopyears.pWhatpwaspthepreportedpbalancep
ofpNelson’spInvestmentpinpFuelpCo.patpDecemberp31,p2021?
6)p
Versionp1 4
mynursytest.store
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
Correct answers are located at the 2nd half this document
p p p p p p p p p
MULTIPLEpCHOICEp-
pChooseptheponepalternativepthatpbestpcompletespthepstatementporpanswerspthepquestion.
1) BakerpCompanypownsp15%pofpthepcommonpstockpofpCharliepCorporationpandpusedpthepf
air-
valuepmethodptopaccountpforpthispinvestment.pCharliepreportedpnetpincomepofp$120,000pforp2021p
andppaidpdividendspofp$70,000ponpOctoberp1,p2021.pHowpmuchpincomepshouldpBakerprecognize
ponpthispinvestmentpinp2021?
1) p
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
02pDescribepinpgeneralpthepvariouspmethodspofpaccountingpforpanpinvestmentpinpGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatible
Topicp:pAccountingpforpInvestments―VariouspMethods
2) LoefflerpCompanypownsp35%pofpthepcommonpstockpofpTetterpCo.pandpusespthepequitypmeth
odptopaccountpforpthepinvestment.pDuringp2021,pTetterpreportedpincomepofp$260,000pandppaidpdivide
ndspofp$90,000.pTherepispnopamortizationpassociatedpwithpthepinvestment.pDuringp2021,p howpmuchp
incomepshouldpLoefflerprecognizeprelatedptopthispinvestment?
2)p
Versionp1 1
mynursytest.store
,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
04pDescribepthepfinancialpreportingpforpequitypmethodpinvestmentspandppreparepGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatiblepTopicp:pEquityp
Method―BasicpJournalpEntries
3) OnpJanuaryp1,p2021,pLeepCompanyppaidp$1,870,000pforp80,000psharespofpThomaspCo.’spvot
ingpcommonpstockpwhichprepresentspap45%pinvestment.pNopallocationptopgoodwillporpotherpspecific
paccountpwaspnecessary.pSignificantpinfluencepoverpThomaspwaspachievedpbypthispacquisition.pTho
maspdistributedpapdividendpofp$2.00pperpsharepduringp2021pandpreportedpnetpincomepofp$720,000.p
WhatpwaspthepbalancepinpthepInvestmentpinpThomaspCo.paccountpfoundpinpthepfinancialprecordspofpLe
epaspofpDecemberp31,p2021?
3)p
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
Versionp1 2
mynursytest.store
,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
Bloom'sp:pApply
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
LearningpObjectivep:p01-
04pDescribepthepfinancialpreportingpforpequitypmethodpinvestmentspandppreparepGradablep:pautomatic
Difficultyp:p3pHard
AACSBp:pKnowledgepApplicationpAccessibilit
yp:pScreenpReaderpCompatible
Topicp:pEquitypMethod―InvestmentpAccountpBalance
4) Apnecessarypconditionptopusepthepequitypmethodpofpreportingpforpanpequitypinvestmentpispt
hatpthepinvestorpcompanypmust
4)p
A) havepthepabilityptopexercisepsignificantpinfluencepoverpthepoperatingpandpfinancialp
policiespofpthepinvestee.
B) ownpatpleastp30%pofpthepinvestee'spvotingpstock.
C) possesspapcontrollingpinterestpinpthepinvestee'spvotingpstock.
D) notphavepthepabilityptopexercisepsignificantpinfluencepoverpthepoperatingpandpfinancialp
policiespofpthepinvestee.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
Bloom'sp:pRemember
AACSBp:pReflectivepThinking
LearningpObjectivep:p01-
03pIdentifypthepsolepcriterionpforpapplyingpthepequitypmethodpofpaccountingpapGradablep:pautomatic
Difficultyp:p1pEasy
Accessibilityp:pScreenpReaderpCompatible
Topicp:pEquitypMethod―SignificantpInfluencepCriterion
Versionp1 3
mynursytest.store
, DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
p p p p p p p p p
Advanced Accounting 14th Hoyle Chapter 01
p p p p p
5) OnpJanuaryp1,p2019,pDermotpCompanyppurchasedp15%pofpthepvotingpcommonpstockpofpH
ornepCorp.pOnpJanuaryp1,p2021,pDermotppurchasedp28%pofpHorne’spvotingpcommonpstock.pIfpDe
rmotpachievespsignificantpinfluencepwithpthispnewpinvestment,phowpmustpDermotpaccountpforpthep
changeptopthepequitypmethod?
5)p
A) Itpmustpusepthepequitypmethodpforp2021pbutpshouldpmakepnopchangespinpitspfinancialps
tatementspforp2020pandp2019.
B) Itpshouldppreparepconsolidatedpfinancialpstatementspforp2021.
C) Itpmustprestatepthepfinancialpstatementspforp2020pandp2019paspifpthepequitypmethodphadpb
eenpusedpforpthoseptwopyears.
D) Itpshouldprecordpappriorpperiodpadjustmentpatpthepbeginningpofp2021pbutpshouldpnotpr
estatepthepfinancialpstatementspforp2020pandp2019.
E) Itpmustprestatepthepfinancialpstatementspforp2020paspifpthepequitypmethodphadpbeenpu
sedpthen.
QuestionpDetails
Accessibilityp:pKeyboardpNavigationp
AICPAp:pBBpCriticalpThinkingpAICP
Ap:pFNpMeasurement
Bloom'sp:pUnderstand
LearningpObjectivep:p01-
06apUnderstandpthepfinancialpreportingpconsequencespforpapchangeptopthepequitpGradablep:pautomatic
Difficultyp:p2pMediumpAACS
Bp:pAnalyticalpThinking
Topicp:pReportpChangeptopEquitypMethodpAcc
essibilityp:pScreenpReaderpCompatible
6) DuringpJanuaryp2020,pNelson,pInc.pacquiredp30%pofpthepoutstandingpcommonpstockpofp
FuelpCo.pforp$1,600,000.pThispinvestmentpgavepNelsonpthepabilityptopexercisepsignificantpinflue
ncepoverpFuel.pFuel’spassetsponpthatpdatepwereprecordedpatp$7,200,000pwithpliabilitiespof
$3,400,000.pAnypexcesspofpcostpoverpbookpvaluepofpNelson’spinvestmentpwaspattributedptopu
nrecordedppatentsphavingpapremainingpusefulplifepofptenpyears.
Inp2020,pFuelpreportedpnetpincomepofp$650,000.pForp2021,pFuelpreportedpnetpincomepof
$800,000.pDividendspofp$250,000pwereppaidpinpeachpofptheseptwopyears.pWhatpwaspthepreportedpbalancep
ofpNelson’spInvestmentpinpFuelpCo.patpDecemberp31,p2021?
6)p
Versionp1 4
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