71. Desmond Corporation owns 3,500 of the 10,000 outstanding ordinary shares of Wetmore Corporation. During 2014, Wetmore earned £2,400,000 and paid cash dividends of £800,000.
How much investment revenue should Desmond report in 2014?
a.£800,000.
b.£840,000.
c.£560,000.
d.£2,400,000.
72. Elston Corporation sells 100 ordinary shares being held as an investment. The shares were acquired six months ago at a cost of $30 a share. Elston sold the shares for $40 a share. The entry to record the sale is
a.Cash............................................3,000
Loss on Sale of Share Investments ...............................1,000
Share Investments ..........................................4,000
b.Share Investments .................................4,000
Cash ...........................................4,000
c.Cash............................................4,000
Gain on Sale of Share Investments ...............................1,000
Share Investments ..........................................3,000
d.Cash............................................4,000
Share Investments ..........................................4,000
73. Greene Corporation sells 200 ordinary shares being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Greene sold the shares for $40 a share. The entry to record the sale is
a.Cash............................................8,000
Loss on Sale of Share Investments ...............................2,000
Share Investments ..........................................10,000
b.Cash............................................10,000
Gain on Sale of Share Investments ...............................2,000
Share Investments ..........................................8,000
c.Cash............................................8,000
Share Investments ..........................................8,000
d.Share Investments .................................8,000
Loss on Sale of Share Investments ...............................2,000
Cash...........................................10,000
74. Nagen Company had these transactions pertaining to share investments:
Feb. 1 Purchased 2,000 shares of Horton Company (10%) for ?34,000 cash.
June 1 Received cash dividends of ?2 per share on Horton shares.
Oct. 1 Sold 800 Horton shares for ?15,600.
The entry to record the purchase of the Horton shares would include a
a.credit to Share Investments for ?34,000.
b.credit to Cash for ?30,000.
c.debit to Share Investments for ?34,000.
d.debit to Investment Revenue for ?4,000
Feb. 1 Purchased 2,000 shares of Horton Company (10%) for ?34,000 cash.
June 1 Received cash dividends of ?2 per share on Horton shares.
Oct. 1 Sold 800 Horton shares for ?15,600.
The entry to record the receipt of the dividends on June 1 would include a
a.debit to Share Investments for ?4,000.
b.credit to Dividend Revenue for ?4,000.
c.debit to Dividend Revenue for ?4,000.
d.credit to Share Investments for ?4,000.
Feb. 1 Purchased 2,000 shares of Horton Company (10%) for ?34,000 cash.
June 1 Received cash dividends of ?2 per share on Horton shares.
Oct. 1 Sold 800 Horton shares for ?.15,600.
The entry to record the sale of the shares would include a
a.debit to Cash for ?13,600.
b.credit to Gain on Sale of Share Investments for ?3,600.
c.debit to Share Investments for ?13,600.
d.credit to Gain on Sale of Share Investments for ?2,000.
77. Mouns Company owns 40% interest in the shares of Darian Corporation. During the year, Darian pays $20,000 in dividends to Mouns, and reports $100,000 in net income. Mouns Company’s investment in Darian will increase Mouns’ net income by
a.$20,000.
b.$40,000.
c.$32,000.
d.$8,000.
78. Nance Company owns 40% interest in the shares of Finley Corporation. During the year, Finley pays $25,000 in dividends, and reports $100,000 in net income. Nance Company’s investment in Finley will increase by
a.$25,000.
b.$40,000.
c.$32,000.
d.$30,000.
79. On January 1, 2014, Garner Corporation purchased 30% of the ordinary shares outstanding of Landon Corporation for $200,000. During 2014, Landon Corporation reported net income of $80,000 and paid cash dividends of $40,000. The balance of the Share Investments—Landon account on the books of Garner Corporation at December 31, 2014 is
a.$200,000.
b.$240,000.
c.$280,000.
d.$212,000.
80. Osaka Co. acquired a 10% interest in Chen Corp. on December 31, 2013 for HK$3,780,000. During 2014, Chen had net income of HK$2,400,000 and paid cash dividends of HK$600,000. Osaka's 2014 income statement will report
a.dividend income of HK$60,000.
b.investment income of HK$180,000.
c.investment income of HK$240,000.
d.cannot be determined from the information given.