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  Table 16-6 The following are transactions in the purchase and sale of Epstein Ltd. shares by Monty Inc. January 15, 2013Purchase 1, 000 shares of Epstein at $25.00 February 10, 2013Received $1.00 dividend from Epstein December 31, 2013Epstein reported net income of $10,000. December 31, 2013Market value of Epstein shares $24.50. June 30, 2014Sold all.
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1) Foreign-currency transaction gains or losses are reported as part of net sales on the income statement. 2) The measure of one currency against another currency is called the foreign-currency exchange rate. 3) A foreign currency transaction gain or loss occurs when the exchange rate changes between the date an order is.
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1) Long-term equity investments may be of several different types , depending on the purpose of the investment and thus the percentage of voting interest acquired. 2) Equity investments reported at market value on the balance sheet can be either short-term investments or long-term investments. 3) Equity investments where there is no.
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45) The distribution of a stock dividend would appear in the: A) operating activities section B) financing activities section C) investing activities section D) It would not appear on the cash flow statement. 46) The payment of a  cash dividend would appear in the: A) operating activities section B) financing activities section C) investing activities section D) It would.
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5) Referring to Table 16-3, the investment in common shares account will appear on Harper Corporation's December 31, 2014, balance sheet at: A) $864,000 B) $836,000 C) $890,000 D) $746,000 36) Referring to Table 16-3, assume on December 31, 2014, Harper Corporation sells 50% of its investment in Martin Corporation for $525,000. Harper Corporation will.
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5) When bonds are converted into shares, shareholders' equity is increased by the face value of the bonds. 6) Redeemable bonds may be paid off at the company's option. The bondholder does not have the choice to refuse but must surrender the bond for retirement. 7) The entire portion of long-term debt.
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25) Investors analyze the cash flow statement to determine: A) total interest earned during the period B) which companies are reporting unearned revenue C) the debt-to-equity ratio D) which businesses are expanding and which are cutting back on investments 26) The cash flow statement is divided into three major categories including: A) financing, capital, and investing.
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15) Immediately after the interest payment, Canton Corporation's $1,000,000 of bonds were converted into 200,000 common shares. The unamortized premium on the bonds at the date of conversion was $34,650. The entry to record the conversion would include a: A) debit to Bonds Payable for $1,000,000 B) credit to Premium on Bonds.
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6) Long-term investments in bonds are accounted for at fair value. 7) Long-term bond investments are reported on the balance sheet at: A) their original cost B) their amortized cost C) the lower of their original cost or year-end market value D) at market value 8) If a bond investment is classified as a Long-Term.
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14) Samson Corporation issues $200,000, 10%, five-year bonds at 103. The total interest expense over the life of the bonds is: A) $106,000 B) $26,000 C) $100,000 D) $94,000 15) Samson Corporation issues $200,000, 10%, five-year bonds at 97. The total interest expense over the life of the bonds is: A) $106,000 B) $26,000 C) $100,000 D) $94,000 16) Several.
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24) Under the effective-interest method of amortizing bond discount, the interest expense recorded for each semiannual interest payment: A) is equal to the carrying value of the bond times the contract rate of interest for one-half a year B) will decrease over the life of the bond C) is at the same percentage.
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11) The unrealized gains and losses on investments reported at fair value are recorded in the non-operating section of a company's income statement. 12) The Fair-Value Valuation Allowance account is a companion account to the Short-Term Investments or Long-Term Investments account. 13) The Unrealized Gain on Fair-Value Adjustment account appears on the.
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50) In early 2013, Brownlee Corporation found itself with idle cash that it decided to invest in the shares of another business. The following events transpired in 2013 and 2014: 2013 Feb.  1Brownlee Corporation purchased 1,000 shares in Green Corporation at 16.50 per share. This investment was classified as a short-term investment. Nov..
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11) Usually a short-term or cancelable rental agreement 12) tenant in a lease agreement 13) property owner in a lease agreement 14) Unsecured bonds, backed only by the good faith of the borrower 15) Decide whether each of the following situations involving lease agreements should be recorded as an operating lease or as a.
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5) If an investor company owns 25% of the shares of another business and exercises significant influence , dividends received from the investee are generally recorded by decreasing the value of the investment account. 6) Accounting Standards  for Private Enterprises (ASPE) allow parent companies to account for their subsidiaries using the.
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41) When accounting for short-term investments: A) only gains are recorded when market value increases above cost B) only losses are recorded when market value increases above cost C) losses and gains are recorded when market value changes D) losses are recorded only when market value decreases below cost Table 16-8 On July 15, 2014, Sanders.
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21) Short-term equity investments with no significant influence are reported at: A) cost as long-term assets on the balance sheet B) market value as either current assets or long-term investments on the balance sheet C) market value as current assets on the balance sheet D) lower of cost or market as current assets on.
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  Table 16-12 On June 30, 2014, Robin Corporation purchased five-year, 7% bonds of Saxton Limited as an investment at a price of 94 based on a market rate of interest of 8.5%. Robin Corporation plans on holding these bonds for the five-year term when their maturity value will be $20,000. Robin.
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49) Sky Corporation engaged in several transactions involving a long-term investment. The equity method is used to account for this investment because Sky exercises significant influence over Lift. a) On Jan 1, 2014, Sky Corporation purchased 2,000 common shares of Lift Corporation for $12 per               share. This represents 20% ownership.
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  A) fair value option B) amortized cost 3) Accounting treatment for bonds available under IFRS but not ASPE 4) Describe the main difference in accounting for long-term liabilities under IFRS and ASPE. 1) The future value of $500 after two years at 12% interest per year is: A) $560.00 B) $627.00 C) $446.43 D) $398.60 2) Answer each of.
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  Table 15-4 Luther Enterprises is considering alternative ways of raising capital for the purchase of a new factory. One alternative suggested by the controller is the issuance of bonds. After discussions with an underwriter, Luther decides to issue $3,000,000 of 6.4%, 10-year bonds dated May 1, 2013, with interest payment.
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11) Refer to Table 16-10. Which of the following is the correct journal entry on June 30, 2015? A) Cash 800,000 Loss on Sale of Investment 145,000         Investment in BlueSky Drilling Common Shares 945,000 B) Cash 800,000 Loss on Sale of Long-Term Investments 150,000         Fair-Value Valuation Allowance 200,000         Long-Term Investments 750,000 C) Cash 800,000 Loss on Sale of Short-Term Investments 150,000         Fair-Value Valuation Allowance 200,000        .
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68) Indicate the effect that each of the following transactions has on the cash balance. Use + for increase, - for decrease, and 0 for no change. ________  a) Payment of salaries ________  b) Payment of interest ________  c) Payment of dividends ________  d) Sale of common shares ________  e) Payment of accounts payable ________  f).
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  Table 16-11 Parent Corporation paid $110,000 to acquire 60% of the common shares of Subsidiary Inc. on December 31, 2014. At that date, Parent Corporation also had an outstanding note payable to Subsidiary Inc. in the amount of $50,000. Assume that Parent Corporation and Subsidiary Inc. had the following account balances at.
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1) The interest expense paid on bonds lowers corporate net income while dividends paid on shares have no effect on net income. 2) Issuing bonds instead of shares generally results in higher earnings per share because interest expense is tax deductible and ownership is not diluted. 3) Earning more income on borrowed.
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18) The Farmer Corporation engaged in the following transactions during 2014.  Farmer uses a perpetual inventory system: Mar. 31Purchased merchandise from an Dutch supplier at a cost of 100,000 Euros. The exchange                             rate on this date was $1.30 per Euro. Apr . 19Paid for the merchandise. The exchange rate on.
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11) Which of the following statements accurately describes the cash flow statement? A) It shows the relative proportion of debt and assets. B) It shows the link between accrual based income and the cash reported on the balance sheet. C) It indicates when long-term debt will mature. D) It shows the link between book.
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11) Bass Electronics Corporation sold merchandise on account to a British company for 80,000 British pounds. Each pound was worth $2.35. The entry to record this sale is: A) Accounts Receivable 188,000         Sales Revenue 188,000 B) Accounts Receivable 80,000 Foreign-Currency Transaction Loss 108,000         Sales Revenue 188,000 C) Accounts Receivable 188,000        Sales Revenue 108,000        Foreign-Currency Trans. Gain 80,000 D) No entry is recorded until.
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1) All share purchases are initially recorded at cost. 2) Short-term  investments are reported on the balance sheet at current market value or cost, whichever value is highest. 3) All short-term investments are recorded initially at cost, but are reported on the balance sheet at current market value. 4) Dividends do not accrue.
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55) Free cash flow is: A) cash available from operations B) cash available from investing activities C)  cash available from operations after paying for planned investments in long-term assets D) cash available from operations after paying dividends to common shareholders 56) Which of the following describes the operating activities as shown in the cash flow.
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  Table 16-6 The following are transactions in the purchase and sale of Epstein Ltd. shares by Monty Inc. January 15, 2013Purchase 1, 000 shares of Epstein at $25.00 February 10, 2013Received $1.00 dividend from Epstein December 31, 2013Epstein reported net income of $10,000. December 31, 2013Market value of Epstein shares $24.50. June 30, 2014Sold all.
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35) Cash received from the sale of a long-term investment would appear in the: A) investing activities section B) financing activities section C) operating activities section D) would not appear on the cash flow statement 36) Cash received from dividends on shares owned as a  long-term investment would appear in the: A) investing activities section B) financing.
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31) A short-term investment acquired for $25,000 has a year-end market value of $23,200. The adjusting entry involves a: A) debit to Unrealized Loss on Fair-Value Adjustment for $1,800 B) debit to Short-Term Investments for $1,800 C) credit to Unrealized Gain on Fair-Value Adjustment for $1,800 D) credit to Short-Term Investments for $1,800 32) An.
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23) On December 31, 2014, Parent Corporation paid $800,000 to acquire 100% of the voting common shares of Child Corporation. At that date Child Corporation had common shares of $500,000 and retained earnings of $250,000. Assume any amount paid in excess of shareholders' equity is attributable to goodwill. a) Prepare the.
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