Submitted by: Submitted by vivianxiong1224
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Words: 4168
Pages: 17
Category: Business and Industry
Date Submitted: 02/18/2016 05:31 PM
CHAPTER 1
SOLUTIONS TO MULTIPLE CHOICE QUESTIONS, EXERCISES AND PROBLEMS
MULTIPLE CHOICE QUESTIONS
1. c
$180,000 - $160,000 = $20,000
$125,000 - $100,000 = 25,000
Total gain $45,000
2. a
$29,000 - $26,000 = $3,000
3. a
$207,544 – [(6% x $200,000) – (4% x $207,544)] = $203,846
4. c
AOCI, beginning balance $ 4,000 credit
Reclassification of unrealized loss on AFS securities sold 1,000 credit
Unrealized gain on AFS securities held at year-end (1) 6,000 credit
AOCI, ending balance $11,000 credit
(1) $81,000 – ($100,000 - $25,000) = $6,000 unrealized gain
5. d
$5,000,000 + 40% x ($600,000 - $200,000) = $5,160,000
6. b
7. b
Reported net income 35% x $7,000,000 = $ 2,450,000
Less unconfirmed profit on ending inventory
35% x [$6,000,000 – ($6,000,000/1.25)] = (420,000)
Equity in net income for 2014 $ 2,030,000
Less dividends 35% x $2,000,000 (700,000)
Plus beginning investment balance 50,000,000
Ending investment balance $51,330,000
8. d
Fizzy’s entry to record the acquisition is:
|Current assets | |25,000 | |
|Property | |2,500,000 | |
|Goodwill | |25,475,000 | |
| |Liabilities | |3,000,000 |
| |Cash | |25,000,000 |
9. b
10. a
EXERCISES
E1.1 Investment in Trading Securities
(in millions)
a. $209 + 3 = $212
b. Unrealized gains and losses on...