1 A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively: Choose one answer. a. 11.3%; 1.73. b. 11.3%; 19.5. c. 1.7%; 19.5. d. 1.7%; 11.3. e. 19.5%; 11.3. Question 2 If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3 Canadian dollars will buy ____ worth of U.S. dollars. Choose one answer. a. $0.2759 b. $0.82777 c. $1.82777 d. $2.48 e. None of these. Question 3 On November 12, Kera, Inc., a U.S. Company, sold merchandise on credit to Kakura of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 on the date of sale. On December 31, when Kera prepared its financial statements, the exchange rate was $0.00843. Kakura paid in full on January 12, when the exchange rate was $0.00861. On January 12, Kera should prepare the following journal entry: Choose one answer. a. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,555; credit Foreign Exchange Gain $360. b. Debit Cash $12,555; debit Foreign Exchange Loss $360; credit Accounts Receivable-Kakura $12,915. c. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $90. d. Debit Cash $12,645; debit Foreign Exchange Loss $90; credit Accounts Receivable-Kakura $12,915. e. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $270. Question 4 Short-term investments in held-to-maturity debt securities are accounted for using the: Choose one answer. a. Fair value method with fair value adjustment to income. b. Fair value method with fair value adjustment to equity. c. Cost method with amortization. d. Cost method without amortization. e. Equity method. Question 5 On July 31, Beatrice Co. purchased 2,000 shares of SimmTech stock for $16,000. The investment is classified as available-for-sale securities. On October 31, which is Beatrice's year-end, the stock had a fair value of $20,000. Beatrice should record a: Choose one answer. a. Credit to Unrealized Gain-Equity for $4,000. b. Credit to Market Adjustment - Available-for-Sale for $4,000. c. Credit to Investment Revenue for $4,000. d. Debit to Investment Revenue for $4,000. e. Debit to Unrealized Gain-Equity for $4,000. Question 6 When a credit sale is denominated in a foreign currency, the foreign exchange rate used to record the sale is the current exchange rate: Choose one answer. a. Thirty days from the date of sale. b. At the end of the seller's fiscal year. c. At the end of the buyer's fiscal year. d. On the date final payment is made. e. On the date of the sale. Question 7 A U.S. company makes a sale to a foreign customer payable in 30 days in the customer's currency. The sale would be recorded by the U.S. company on the date: Choose one answer. a. Of sale using a projected estimate of the U.S. dollar value at payment date. b. Of sale using a 30-day average U.S. dollar value. c. Of sale using the current dollar value. d. Of sale using the foreign currency value. e. When payment is received. Question 8 Marks: 1 Long-term investments are reported in the: Choose one answer. a. Current asset section of the balance sheet. b. Intangible asset section of the balance sheet. c. Non-current section of the balance sheet called long-term investments. d. Plant assets section of the balance sheet. e. Equity section of the balance sheet. Question 9 Everrine Corporation owns 30% of JRW Corporation. Everrine Corporation received $9,000 in cash dividends from JRW Corporation. The entry to record receipt of these dividends is: Choose one answer. a. Debit Cash, $9,000; credit Long-Term Investments, $9,000. b. Debt Long-Term Investment, $9,000; credit Cash, $9000. c. Debit Cash, $9,000; credit Interest Revenue, $9,000. d. Debit Unrealized Gain-Equity, $9,000; credit Cash, $9,000. e. Debit Cash, $9,000; credit Dividend Revenue, $9,000. Question 10 On February 15, Seacroft buys 7,000 shares of Kebo common stock at $28.53 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. On March 15, Kebo declares a dividend of $1.15 per share payable to stockholders of record on April 15. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250. The journal entry to record the purchase on February 15 is: Choose one answer. a. Debit Long-Term Investments-HTM $199,710; credit Cash $199,710. b. Debit Long-Term Investments-AFS $199,710; credit Cash $199,710. c. Debit Long-Term Investments-Trading $199,710; credit Cash $199,710. d. Debit Long-Term Investments-Trading $200,110; credit Cash $200,110. e. Debit Long-Term Investments-AFS $200,110; credit Cash $200,110