1. ABC owned the following equity securities held as long term investments on December 31, 2013. All are traded over the counter Security Percent Owned M. Common Stock 15 percent IN, Common Stock 25 percent with significant influence . Common Stock 35 percent ABC should account for these securities by applying the A. Equity method for securities M and N, and the cost method for security O. B. Equity method for all of these securities. C. Fair value method for the security of Mand the equity method for security N and O. D. Fair value method for all of these securities. 2. A company should accrue a loss contingency only if the likelihood that a liability has been incurred is: A. More likely than not and the amount of the loss is known. B. At least reasonably possible and the amount of the loss can be reasonably estimated C. At least reasonably possible and the amount of the loss is known. D. Probable and the amount of the loss can be reasonably estimated 3. On November 7, 2014 local residents sued Brimley Corporation for excess chemical emissions that caused some of them to seek medical attention. The total lawsuit is $8,000,000. Brimley Corporation's lawyers believe that the lawsuit will be successful and that the amount to be paid to the residents will be $4,000,000. On its December 31, 2014 financial statements Brimley should: A. Simply disclose the details regarding the lawsuit in a note. B. Accrue a provision loss of $8,000,000 with no financial statement disclosure necessary. C. Accrue a provision loss of $4,000,000 and note disclose. D. Do nothing as the lawsuit has not yet ended. 4. Which of the following costs generally would be capitalized to a property, plant and equipment account? A. Maintenance cost for the first year B. Fire insurance paid after acquisition C. Property taxes relating to periods after acquisition D. Shipping cost paid when purchasing the assets 5. Intangible assets have all of the following characteristics, except: A. they are relatively long-lived. B. they provide benefits to current operations only. C. they have no physical substance. D. their ownership confers rights, but no physical substance. Grab Manufacturing Co. purchased a 10-ton draw press at a cost of $180,000. Shipping costs were $4,4 and insurance in transit was $200. Installation costs totaled $12,000, which included $4,000 for taking out a sect a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the 10-ton draw is: A. $187,600 B. $196,600