51.
On January 2, 2010, Pfizer Co. purchased 22% of Wiley Company's voting stock for $150,000. During 2010, Wiley recorded income of $102,000 and paid total dividends of $27,000. Pfizer uses the equity method to account for this investment. What is Pfizer’s income from the Wiley investment?
$27,000
$28,380
$22,440
$33,000
52.On January 2, 2010, Pfizer Co. purchased 22% of Wiley Company's voting stock for $150,000. During 2010, Wiley recorded income of $102,000 and paid total dividends of $27,000. Pfizer uses the equity method to account for this investment. What is the December 31, 2010, balance sheet value of its long-term equity investment in Wiley?
$178,380
$225,000
$150,000
$166,500
53.
If Howard Company’s balance sheet amount of goodwill is $20,000 and the fair market value of the goodwill is estimated to be $25,000, which of the following entries would be recorded in Howard’s books?
a. Goodwill 5,000
Goodwill Market Gain 5,000
b. Goodwill Market Gain 5,000
Goodwill 5,000
c. Goodwill impairment Charge 5,000
Goodwill 5,000
d. No entry will be made.
54. On December 31, 2010, available-for-sale securities with an original cost of $15,000 have a carrying value on the balance sheet equal to their market value of $20,000. On January 5, 2011, those securities are sold for $18,000. Which of the following would be part of the appropriate entry to record the sale of the available-for-sale securities?
A credit to Realized Gain on Available-for-Sale Securities for $5,000.
A debit to Unrealized Price Increase on Available-for Sale Securities for $3,000.
A debit to Unrealized Price Increase on Available-for Sale Securities for $5,000.
A credit to Available-for Sale Securities for $15,000.
55.On January 2, 2010, Dellgate Corp. purchased 27% of Galaxy Corporation's voting stock for $125,000. During 2010, Galaxy recorded income of $214,000 and paid total dividends of $17,000. Dellgate uses the cost method to account for this investment. What is the December 31, 2010, balance sheet value of Dellgate’s long-term equity investment in Galaxy?
$125,000
$178,190
$187,370
$86,940
56.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, Solo sold all of its investment in AAA securities for $36 per share.
The journal entry to record the 2009 revaluation of the AAA securities would be:
Trading Securities500
Unrealized Gain on Trading Securities 500
Unrealized Loss on Trading Securities 500
Trading Securities 500
Unrealized Loss on Trading Securities 500
Cash 500
Trading Securities 500
Realized Gain on Trading Securities 557.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, the company sold 50 shares of BBB for $26 per share. During 2010, Solo received dividends of $3 per share on the remaining 200 shares of BBB. The per-share market value of BBB on December 31, 2010 was $24. During 2011, Solo sold the remaining 200 shares of BBB stock for $26 per share.
The journal entry to record the 2009 revaluation of the BBB securities would be:
Trading Securities500
Unrealized Gain on Trading Securities 500
Unrealized Loss on Trading Securities 500
Trading Securities500
Unrealized Loss on Trading Securities 500
Cash500
Trading Securities 500
Realized Gain on Trading Securities58.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
During 2010, Solo received word that dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market value of CCC on December 31, 2010, was $18. During 2011, Solo sold 150 shares of CCC for $22 per share.
The journal entry to record the 2009 revaluation of the CCC securities would be:
Available-for-Sale Securities 600
Realized Gain on Available-for-Sale Securities 600
Unrealized Loss on Available-for-Sale Securities 600
Available-for-Sale Securities 600
Realized Loss on Available-for-Sale Securities 600
Available-for-Sale Securities 600
Available-for-Sale Securities 600
Unrealized Price Increase on Available-for-Sale Securities 600
59.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, Solo sold all of its investment in AAA securities for $36 per share.
The journal entry to record the 100 shares of AAA stock sold in 2010 will include:
A debit to Trading Securities for $3,400.
A credit to Unrealized Loss on Trading Securities for $200.
A credit to Realized Loss on Sale of Trading Securities for $200.
A credit to Realized Gain on Sale of Trading Securities for $200.
60.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, the company sold 50 shares of BBB for $26 per share.
The journal entry to record the 50 shares of BBB stock sold in 2010 will include:
A credit to Trading Securities for $1,400.
A credit to Unrealized Loss on Trading Securities for $100.
A credit to Realized Loss on Sale of Trading Securities for $100.
A debit to Realized Gain on Sale of Trading Securities for $100.
61.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, the company sold 50 shares of BBB for $26 per share. During 2010, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2010, were $24 and $18, respectively. During 2011, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entry to record the dividends received on the BBB securities and the dividends declared on the CCC stock in 2010 will include:
A credit to Dividend Revenue for $975.
A credit to Dividend Payable for $375.
A credit to Cash for $600.
A debit to Dividend Expense for $375.
62.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, the company sold 50 shares of BBB for $26 per share. During 2010, Solo received dividends of $3 per share on the remaining 200 shares of BBB, and dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market values of BBB and CCC on December 31, 2010, were $24 and $18, respectively. During 2011, Solo sold the remaining 200 shares of BBB stock for $26 per share and the 150 shares of CCC for $22 per share.
The journal entry to record the revaluation of BBB shares in 2010 is:
Trading Securities800
Unrealized Gain on Trading Securities 800
Unrealized Loss on Trading Securities 800
Trading Securities800
Unrealized Loss on Trading Securities 600
Cash600
Trading Securities 800
Realized Gain on Trading Securities 863.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
During 2010, Solo received word that dividends of $2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market value of CCC on December 31, 2010, was $18. During 2011, Solo sold 150 shares of CCC for $22 per share.
The journal entry to record the revaluation of CCC shares in 2010 is:
Available-for-Sale Securities 300
Unrealized Gain on Available-for-Sale Securities 300
Unrealized Price Increase on Available-for-Sale Securities 300
Available-for-Sale Securities 300
Realized Loss on Available-for-Sale Securities 300
Available-for-Sale Securities 300
Available-for-Sale Securities 400
Unrealized Price Increase on Available-for-Sale Securities 400
64.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
Early in 2010, the company sold 50 shares of BBB for $26 per share. During 2010, Solo received dividends of $3 per share on the remaining 200 shares of BBB. The per-share market value of BBB on December 31, 2010, was $24. During 2011, Solo sold the remaining 200 shares of BBB stock for $26 per share.
The journal entry to record the sale of 200 shares of BBB stock in 2011 is:
Cash5,200
Trading Securities4,800
Unrealized Gain on Trading Securities 400
b.Cash5,200
Unrealized Loss on Trading Securities 400
Trading Securities4,800
c.Cash5,200
Trading Securities4,800
Realized Gain on Trading Securities 400
d.Trading Securities 6,000
Realized Gain on Trading Securities 800
Cash5,200
65.
The following information related to the marketable security investments of Solo Company. Securities held on December 31, 2009, as described in the table below. AAA and BBB are classified as trading securities and CCC is classified as an available-for-sale security.
Securities
|
No. of Shares
|
Cost/Share
|
Total Cost
|
Value/Share
|
Total Market Value
|
AAA
|
100
|
$29
|
$2,900
|
$34
|
$3,400
|
BBB
|
250
|
30
|
7,500
|
28
|
7,000
|
CCC
|
150
|
16
|
2,400
|
20
|
3,000
|
|
|
|
$12,800
|
|
$13,400
|
During 2010, Solo received word that dividends of $$2.50 per share were declared, but not yet received on the 150 shares of CCC stock. The per-share market value of CCC on December 31, 2010, was $18. During 2011, Solo sold 150 shares of CCC for $22 per share.
The journal entry to record the sale of 150 shares of CCC stock in 2011 would include:
A debit to Cash for $2,700.
A debit to Unrealized Price Increase on Available-for-Sale Securities for $300.
A debit to Unrealized Gain on Available-for-Sale Securities for $900.
A debit to Available-for-Sale Securities for $3,300.