31.Cash received from the sale of long-term assets is reported as
a.an operating activity
b.a financing activity
c.an adjustment to stockholders' equity
d.an investing activity
32.Long-term investments in the common stock of another company normally should be accounted for using the equity method if the investor owns an interest of
a.more than 50 percent
b.not less than 90 percent
c.not less than 20 percent nor more than 50 percent
d.not more than 20 percent
33.Which of the following is a reason to invest in the securities of other organizations?
a.to obtain cash
b.to incur future debt and increase financial leverage
c.to acquire products from other companies
d.to fund a future repayment of debt
34.An investment that yields significant influence or control is
a.always reported as a long-term asset
b.reported as a long-term asset if it is an investment in preferred stock
c.reported as a long-term asset if it is accounted for under the equity method
d.reported as a long-term asset if it is an investment in the bonds of another company
35.Held-to-maturity securities are reported on the balance sheet at
a.cost
b.amortized cost
c.market value
d.maturity value
36.Trading and available-for-sale securities are reported on the balance sheet at
a.market value
b.maturity value
c.cost
d.amortized cost
37.Marbella Company has an investment in stock, classified as available-for-sale, with the following information at December 31, 2007:
Cost=$240,000
Market value=$280,000
How would Marbella report this information?
a.unrealized holding gain of $40,000 added to stockholders' equity
b.realized gain added to the income statement of $40,000
c.unrealized holding gain deducted from stockholders' equity of $40,000
d.unrealized holding gain added to the income statement of $40,000
38.Which of the following investments is NOT reported on the balance sheet at current market value?
a.available-for-sale investment in bonds
b.trading investment in stocks
c.held-to-maturity investment in bonds
d.available-for-sale investment in stocks
39.Meteorite Company sells its
Available-For-Sale
stock investment at a price of $61 per share. It had originally been purchased at $20 per share and its most recent adjustment had been to a market value of $32 per share. What was the per share realized gain or loss on sale?
a.$29 realized gain
b.$41 realized gain
c.$12 realized loss
d.$73 realized gain
40.If the long-term investment by one company in another is not large enough for complete control, but is large enough for significant influence, then
a.consolidated financial statements are prepared
b.the lower-of-cost-or-market cost method is used to value the investment
c.the equity method is used to value the investment
d.the parent company reports earnings from the investment only when dividends are received from the subsidiary