Question

1. Accounting for the sale of stock is the same for both the cost and the equity methods of accounting for investments.

True or false

2. On May 1, Pierce Company purchased $60,000 of Stanton Company’s 12% bonds at 100 plus accrued interest of $2,400. On June 30, Pierce received its first semiannual interest.  On February 1, Pierce sold $50,000 of the bonds at 103 plus accrued interest.

What are the total proceeds from the February 1 sale?

3. Comprehensive income must be reported on the income statement.

True or false

4. Financial statements include assets listed at

	All of these choices
	their fair value
	their historical cost
	their market value

I think 4 is all of the above but please help!

Answer 1

1)true

2)Rationale:Sale Proceeds = $50,000 × 103% = $51,500 Accrued Interest = $50,000 × 12% × 1/12 = $500 Total Proceeds from Sale = $51,500 + $500 = $52,000

3) false

4). Financial statements include assets listed at :-

All of these choices are correct as :-

Fixed assets are listed at their historical cost and then accumulated depreciation is deducted from them in order to get book value.

Available for sale securities are listed at their fair value.

Inventories , Trading investments are listed at lower of cost or market value