161. Refer to the above data. In financial statements prepared on December 31, 2010, Neptune Corporation reports:
A. The asset Investments in Marketable Securities at $700,000 with footnote disclosure of the market value of $730,000.
B. The asset Investments in Marketable Securities at $730,000, and a $30,000 Unrealized Holding Gain included in total stockholders' equity.
C. The asset Investments in Marketable Securities at $730,000, and a $30,000 gain recognized in the income statement.
D. The asset Investments in Marketable Securities at $700,000, and a $30,000 Unrealized Holding Gain included in total stockholders' equity.
162. Refer to the above data. Assuming Neptune does not sell this investment, the mark-to-market adjustment necessary at December 31, 2011, includes:
A. A $5,000 debit to Unrealized Holding Gain on Investments.
B. A $25,000 credit to Unrealized Holding Gain on Investments.
C. A $5,000 debit to Investments in Marketable Securities.
D. A $725,000 debit to Investments in Marketable Securities.
163. Refer to the above data. Assuming Neptune does not sell this investment, the financial statements prepared at December 31, 2011 will report:
A. Investments in Marketable Securities of $700,000, reduced by a $30,000 Unrealized Holding Gain on Investments, in the asset section of the balance sheet.
B. The asset Investments in Marketable Securities of $700,000 in the balance sheet, and a $25,000 Unrealized Holding Loss on Investments in the income statement.
C. The asset Investments in Marketable Securities of $725,000, and a $5,000 Unrealized Holding Loss deducted from total stockholders' equity.
D. Investment in Marketable Securities of $725,000 in the asset section of the balance sheet, with a $25,000 Unrealized Holding Gain on Investments included in the stockholders' equity section.
164. If a 15%, 60-day note receivable is acquired from a customer in settlement of an existing account receivable of $5,000, the accounting entry for acquisition of the note will:
A. Include a debit to Notes Receivable for $5,750.
B. Include a debit to Notes Receivable for $5,062.50.
C. Include a credit to Interest Revenue for $62.50.
D. Include a debit to Notes Receivable for $5,000 and no entry for interest.
165. Gold Company received a 60-day, 12% note for $8,000 on June 16. Which of the following statements is true?
A. Gold will receive $8,000 plus interest of $960 at maturity.
B. Gold should record a total receivable due of $8,080 on June 16.
C. The principal of the note plus interest is due on August 15.
D. The maturity value of this note is $8,000.
166. On November 1, Willis Corporation sold merchandise in return for a 6%, 90-day note receivable in the amount of $60,000. The proper adjusting entry at December 31 (end of Willis's fiscal year) includes a:
A. Credit to Interest Revenue of $600.
B. Debit to Cash of $600.
C. Debit to Interest Receivable of $300.
D. Credit to Notes Receivable of $900.
On June 1, 2009, Jensen Company acquired an 8%, ten-month note receivable from a customer in settlement of an existing account receivable of $130,000. Interest and principal are due at maturity.
167. Refer to the above data. The proper adjusting entry at December 31, 2009, with regard to this note receivable includes a:
A. Debit to Cash of $6,067
B. Debit to Notes Receivable of $10,400.
C. Credit to Interest Revenue of $10,400.
D. Debit to Accrued Interest Receivable of $6,067.
168. Refer to the above data. Jensen's entry to record the collection of this note at maturity includes a:
A. Credit to Accrued Interest Receivable of $6,067.
B. Credit to Interest Revenue of $6,067.
C. Credit to Interest Receivable of $2,600.
D. Credit to Notes Receivable of $140,400.
On November 1, 2010, Salem Corporation sold land priced at $900,000 in exchange for a 6%, six-month note receivable.
169. Refer to the above data. The journal entry made by Salem to record this transaction on November 1, 2010, includes:
A. A debit to Notes Receivable of $927,000.
B. A debit to Interest Receivable of $27,000.
C. A credit to Interest Revenue of $27,000.
D. A debit to Notes Receivable of $900,000.
170. Refer to the above data. Salem's balance sheet at December 31, 2010 includes which of the following as a result of the sale of land on November 1?
A. Notes Receivable of $900,000 and Interest Receivable of $9,000.
B. Notes Receivable of $927,000 and Interest Receivable of $9,000.
C. Notes Receivable of $900,000 and Interest Receivable of $27,000.
D. Notes Receivable of $900,000 only.