Horngren's Financial & Managerial Accounting
7th Edition
ISBN: 9780136503743
Author: MILLER-NOBLES
Publisher: RENT PEARS
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Chapter 10, Problem 5QC
To determine
Significant interest investments:
Significant interest investments are the equity securities, where the investor holds in between 20% to 50% of the voting stock. These securities are reported as long-term assets in the balance sheet. These investments are accounted for using the Equity method.
To identify: The way in which the dividends received will be recorded by the investor company owning 25% of the voting stock of Company P.
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If a company owns 25% of the voting stock of Pink Co. and can exercise significant influence, dividends received will be
a. credited to Equity Investments—Pink Co.
b. credited to Dividend Revenue.
c. debited to Equity Investments—Pink Co.
d. credited to Cash.
If a company owns 25% of the voting stock of Pink Co. and can exercise significant influence, dividends received will be
credited to Equity Investments—Pink Co.
credited to Dividend Revenue.
debited to Equity Investments—Pink Co.
credited to Cash.
The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is __________Required to answer. Single choice.
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a. referred to as paid-in capital
b. always below its stated value
c. referred to as retained earnings
d. always equal to par value
Chapter 10 Solutions
Horngren's Financial & Managerial Accounting
Ch. 10 - Prob. 1QCCh. 10 - Which of the following investments is most likely...Ch. 10 - If Intervale Railway invests 100,000 in 5% bonds...Ch. 10 - Prob. 4QCCh. 10 - Prob. 5QCCh. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Harvard Co. purchased a trading investment on...Ch. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - What is a debt security?Ch. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Briefly describe the five specific types of debt...Ch. 10 - How is the purchase of a held-to-maturity debt...Ch. 10 - Prob. 6RQCh. 10 - What method is used for investments in equity...Ch. 10 - What method is used for investments in equity...Ch. 10 - What adjustment must be made at the end of the...Ch. 10 - Where on the financial statements is an unrealized...Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - What does the rate of return on total assets...Ch. 10 - Identifying why companies invest and classifying...
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- calculate the ratio (expressed to two decimal places) that would reflect each of the following: The amount of funds available relative to sales, to pay the company’s expenses other than its cost of sales (expressed as a percentage) The company's net income as a percentage of the company's net sales.The ability of the company to generate profits from its shareholders investments in the company.A measure of the dividend pay-out per share of the company's ordinary shares.  The capacity of the company to pay off its current commitments using just its most liquid assets.The degree to which the company’s assets are financed by debt. A measure of how easily the company can pay the interest on its outstanding debt.arrow_forwardNewly formed S&J Iron Corporation has 53,000 shares of $3 par common stock authorized. On March 1, Year 1, S&J Iron issued 12,000 shares of the stock for $10 per share. On May 2, the company issued an additional 23,500 shares for $21 per share. S&J Iron was not affected by other events during Year 1. Required a. Record the transactions in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. b. Determine the amount S&J Iron would report for common stock on the December 31, Year 1, balance sheet. c. Determine the amount S&J Iron would report for paid-in capital in excess of par. d. What is the total amount of capital contributed by the owners? e. What amount of total assets would S&J Iron report on the December 31, Year 1, balance sheet? Complete this question by entering your answers in the tabs below. Req A…arrow_forwardA company invested $45,000 in Yale Co. stock. The investment represented 5% of the voting stock of Yale Co. If the Yale Co. stock investment paid dividends, what account would be credited? Equity Investments Interest Revenue Dividend Revenue Casharrow_forward
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