“Solution Manual for Advanced Accounting 5th Edition by Susan S. Hamlen – Latest Update 2025/2026 – Complete Verified Answers”

Advanced Accounting, 5th Edition
by Susan S. Hamlen

, CHAPTER 1

SOLUTIONS TO MULTIPLE CHOICE QUESTIONS, EXERCISES AND PROBLEMS


MULTIPLE CHOICE QUESTIONS

1. c

$180,000 - $160,000 = $20,000
$125,000 - $100,000 = 25,000
Total gain $45,000

2. a

$29,000 – $26,000 = $3,000

3. a

$207,544 – [(6% x $200,000) – (4% x $207,544)] = $203,846

4. d

Reclassification of unrealized loss on AFS securities sold $1,000 credit
Unrealized gain on AFS securities held at year-end 6,000 credit (1)
Total amount reported in OCI $7,000 credit

(1) $81,000 – ($100,000 – $25,000) = $6,000 unrealized gain

5. d

$5,000,000 + [40% x ($600,000 – $200,000)] = $5,160,000

6. b

,7. b

Reported net income; 35% x $7,000,000 =
S S S S S S $ 2,450,000
S


Less unconfirmed profit on ending inventory
S S S S S S


35% x [$6,000,000 – ($6,000,000/1.25)] =
S S S S S (420,000)
Equity in net income
S S S $ 2,030,000 S


Less dividends; 35% x $2,000,000
S S S S (700,000)
Plus beginning investment balance
S S S 50,000,000
S



Ending investment balance
S S $51,330,000

8. d

Fizzy’s entry to record the acquisition is:
S S S S S S




Current assets S 25,000
Property 2,500,000
Goodwill 25,475,000
Liabilities 3,000,000
Cash 25,000,000

9. b

10. a

11. b

The entry to record the sale is:
S S S S S S




Cash 410,000
Loss on sale of AFS securities
S S S S S 15,000
Investment in AFS securities S S S 400,000
Other comprehensive income S S 25,000
The reclassification of the loss increases OCI, and the loss reported in income is the
S S S S S S S S S S S S S S


difference between the original cost ($400,000 + $25,000) and sales proceeds ($410,000).
S S S S S S S S S S S S




12. b

$285,000 - $300,000 = $15,000 loss
S S S S S

, 13. d

Investment balance at the beginning of 2023 is $203,883 (=$205,768 – ($6,000 – (2% x
S S S S S S S S S S S S S S


$205,768)); 2% x $203,883 = $4,078
S S S S S




14. c

Investment balance at the end of 2022 is $203,827 (=$205,657 – ($8,000 – (3% x
S S S S S S S S S S S S S S


$205,657)); $190,000 - $203,827 = $13,827 loss
S S S S S S




15. c

$510,000 - $500,000 = $10,000; unrealized gains are reported in income.
S S S S S S S S S S




16. b

The basis difference is $180,000 (=$3,000,000 – (30% x $9,400,000))
S S S S S S S S S


(30% x $100,000) – $180,000/10 = $12,000
S S S S S S S




17. d

Investment balance, beginning of 2020 $10,000,000
S S S S S


S($2,400,000 - $2,000,000) x 40% = S 160,000
S S S S


S($150,000 - $200,000) x 40% =
S S (20,000) S S S


S($60,000 + $10,000 - $25,000) x 40% =
S S S S S S S S


S 18,000
Investment balance, end of 2025
S $10,158,000 S S S




18. b

$10,000,000 – ($400,000 + $5,000,000 - $6,000,000) = $10,600,000
S S S S S S S S




19. c

$25,000,000 – ($500,000 + $8,000,000 + $1,000,000 - $6,000,000) = $21,500,000
S S S S S S S S S S




20. c