1. A company had net income of $48,000, net sales of $380,000, and average total assets of $280,000. Its profit margin and total asset turnover were respectively: Multiple Choice 1.36%; 0.17. 1.97%; 1.36. 12.63%; 1.36. 1.36%; 12.63. 12.63%; 0.17.

2. Six months ago, a company purchased an investment in stock for $69,000. The investment is classified as available-for-sale securities. This is the companys first and only investment in available-for-sale securities. The current fair value of the stock is $72,600. The company should record a:

Multiple Choice

Debit to Unrealized Loss-Equity for $3,600.

Debit to Investment Revenue for $3,600.

Credit to Unrealized Gain-Equity for $3,600.

Credit to Investment Revenue for $3,600.

No entry is required.

3. Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X1 is:

Available-for-Sale Securities	Cost			Fair Value
December 31, 20X1	$	255,000		$	245,000
December 31, 20X2	$	344,000		$	355,500
December 31, 20X3	$	414,000		$	455,000

Multiple Choice

Debit Unrealized Gain Equity $10,000; Credit Fair Value Adjustment Available-for-Sale (LT) $10,000.

Debit Unrealized Loss Equity $10,000; Credit Fair Value Adjustment Available-for-Sale (LT) $10,000.

Debit Unrealized Loss Income $10,000; Credit Fair Value Adjustment Available-for-Sale (ST) $10,000.

Debit Fair Value Adjustment Available-for-Sale (LT) $10,000; Credit Unrealized Loss Equity $10,000.

Debit Fair Value Adjustment Available-for-Sale (LT) $10,000; Credit Unrealized Gain Equity $10,000.

4. On June 18, Wyman Company (a U.S. Company) sold merchandise to the Nielsen Company of Denmark for 77,000 (Euros), with a payment due in 60 days. If the exchange rate was $1.52 per euro on the date of sale and $1.31 per euro on the date of payment, Wyman Company should recognize a foreign exchange gain or loss in the amount of:

Multiple Choice

$77,000 gain.

$77,000 loss.

$100,870 loss.

$16,170 gain.

$16,170 loss.

5. Landmark Corp. buys $490,000 of Schroeter Company's 8%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the 5-year life. The journal entry to record the purchase should include:

Multiple Choice

A debit to Long-Term Investments-AFS $490,000.

A debit to Short-Term Investments-Trading $490,000.

A debit to Long-Term Investments-HTM $490,000.

A debit to Short-Term Investments-AFS $490,000.

A debit to Cash $490,000.

6. Canberry Corporation had net income of $92,000, beginning total assets of $712,000 and ending total assets of $640,000. Its return on total assets is:

Multiple Choice

13.6%

12.9%

14.4%

774%

696%

7. On January 4, Year 1, Barber Company purchased 5,500 shares of Convell Company for $66,000 plus a broker's fee of $1,200. Convell Company has a total of 27,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.75 per share, and its net income was $75,000 and $70,000 for Year 1 and Year 2, respectively. The January 12, Year 3, entry to record Barber's sale of 3,300 shares of Convell Company stock, which represents 60% of Barber's total investment, for $44,550 cash should be:

Multiple Choice

Debit Cash $44,550; credit Gain on Sale of Investment $4,230; credit Long-Term Investments $40,320.

Debit Cash $44,550; debit Loss on Sale of Investment $8,220; credit Long-Term Investments $52,770.

Debit Cash $44,550; credit Gain on Sale of Investment $8,250; credit Long-Term Investments $36,300.

Debit Cash $44,550; debit Loss on Sale of Investment $8,250; credit Long-Term Investments $52,800.

Debit Cash $44,550; debit Loss on Sale of Investment $22,650; credit Long-Term Investments $67,200.

8. On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 3,400,000 yen. The exchange rate was $0.00856 on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $0.00862. Kagome paid in full on January 12, when the exchange rate was $0.00880. On January 12, Higgins should prepare the following journal entry:

Multiple Choice

Debit Cash $29,920; credit Accounts Receivable-Kagome $29,104; credit Foreign Exchange Gain $816.

Debit Cash $29,104; debit Foreign Exchange Loss $816; credit Accounts Receivable-Kagome $29,920.

Debit Cash $29,308; credit Accounts Receivable-Kagome $29,104; credit Foreign Exchange Gain $204.

Debit Cash $29,104; debit Foreign Exchange Loss $204; credit Accounts Receivable-Kagome $29,308.

Debit Cash $29,920; credit Accounts Receivable-Kagome $29,308; credit Foreign Exchange Gain $612.

9. On February 15, Jewel Company buys 9,200 shares of Marcelo Corp. common stock at $29.63 per share plus a brokerage fee of $510. The stock is classified as available-for-sale securities. This is the companys first and only investment in available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.70 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $30.40 per share less a brokerage fee of $360. The journal entry to record the sale of the 4,600 shares of stock on November 17 is:

Multiple Choice

Debit Cash $139,480; credit Long-Term Investments-AFS $136,298; credit Gain on Sale of Long-Term Investments $3,182.

Debit Cash $139,840; credit Long-Term Investments-Trading $136,298; debit Gain on Sale of Long-Term Investments $3,542.

Debit Cash $139,840; credit Long-Term Investments-AFS $136,553; credit Gain on Sale of Long-Term Investments $3,287.

Debit Cash $139,480; credit Long-Term Investments-AFS $136,553; credit Gain on Sale of Long-Term Investments $2,927.

Debit Cash $139,840; credit Long-Term Investments-Trading $136,298; credit Gain on Sale of Long-Term Investments $3,542.

10. Landmark buys $370,000 of Schroeter Company's 6%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually on March 1 and September 1. The journal entry Landmark should record to accrue interest earned at year-end December 31 is (Do not round your intermediate calculations):

Multiple Choice

Debit Interest Receivable $11,100, credit Interest Revenue $11,100.

Debit Cash $7,400, credit Interest Revenue $7,400.

Debit Interest Receivable $7,400, credit Interest Revenue $7,400.

Debit Interest Revenue $7,400, credit Interest Receivable $7,400.

Debit Cash $11,100, credit Interest Revenue $11,100.