Question

MC Qu. 70 At the end of the accounting...

At the end of the accounting period, the owners of debt securities:

Multiple Choice

-Must retire the debt.

-Must report the dividend income accrued on the debt securities.

-Must record any interest earned on the debt securities during the period.

-Must record a gain or loss on the interest income earned.

-Must record a gain or loss on the dividend income earned.

MC Qu. 133 On November 12, Higgins...

On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 2,400,000 yen. The exchange rate was $0.00846 on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $0.00852. Kagome paid in full on January 12, when the exchange rate was $0.00870. On January 12, Higgins should prepare the following journal entry:

Multiple Choice

-Debit Cash $20,304; debit Foreign Exchange Loss $576; credit Accounts Receivable-Kagome $20,880.

-Debit Cash $20,880; credit Accounts Receivable-Kagome $20,448; credit Foreign Exchange Gain $432.

-Debit Cash $20,880; credit Accounts Receivable-Kagome $20,304; credit Foreign Exchange Gain $576.

-Debit Cash $20,304; debit Foreign Exchange Loss $144; credit Accounts Receivable-Kagome $20,448.

-Debit Cash $20,448; credit Accounts Receivable-Kagome $20,304; credit Foreign Exchange Gain $144.

MC Qu. 125 Madison Corporation purchased...

Madison Corporation purchased 40% of Jay Corporation for $380,000 on January 1. On June 20 of the same year, Jay Corporation declared total cash dividends of $95,000. At year-end, Jay Corporation reported net income of $475,000. The balance in Madison Corporation's Long-Term Investment-Jay Corporation account as of December 31 should be:

Multiple Choice

-$608,000.

-$703,000.

-$228,000.

-$380,000.

-$532,000.

Answer 1

70) At the end of the accounting period, the owners of debt securities:

So answer is c) Must record any interest earned on the debt securities during the period.

133) On January 12, Higgins should prepare the following journal entry:

So answer is b) Debit Cash $20,880; credit Accounts Receivable-Kagome $20,448; credit Foreign Exchange Gain $432.

125) The balance in Madison Corporation's Long-Term Investment-Jay Corporation account as of December 31 should be:

Balance in investment account = 380000+(475000*40%)-(95000*40%) = 532000

So answer is e) 532000