An unrealized holding loss on a company's Investments classified as Available-for-Sale Debt Securities should be reflected in the financial statements as: a) As a debit to the Securities Fair Value Adjustment Account. b) As a component of Stockholders' Equity-unrealized loss. c) A realized loss in the Income Statement. d) A recognized loss in the Income Statement. 2. In 2019, Delta Inc. entered into a 3-year construction project with the town of Cicero. The following data was extracted from Delta's books for the year ended 2020. (Delta uses the Completed Contract method of accounting) Contract Price Cost incurred to date Estimated costs to complete Billings on construction $12.0M 3.OM 6.OM 2.6M What amount of Revenue should Delta recognize in 2020? a) $12,000,000 b) $0 c) $4,000,000 d) Cannot be determined 00 000 of goods to Kelly Wholesalers less a Ang best reflects the proper $500,000 credit Sales Discounts for 3. Baxter Manufacturing sold $500,000 of goods to Kelly Wholesa trade discount of 10%. Which of the following best reflects th accounting treatment for Baxter? a) Debit Accounts Receivable for $500,000 credit Sales $50,000 and credit Sales for $450,000 sales for $500,000 and Unearned Revenue for $50.00 b) Credit sales for $500,000 and Unearned c) Debit Accounts Receivable for $450,000 di Debit Accounts Receivable for $500,000 and cred discounts $50,000. 500,000 and credit Allowance for Trade 4. On December 31, 2019, Acme reported Investments in Stock - cost $180,000. The fair value of the securities on this date is $200,000. Using fair value accounting, what would be the proper adjustment to reflect the change in fair market value of Acme's investments? a) A $20,000 debit to the Fair Value Adjustment Account b) Unrealized gain of $20,000 - Equity c) Realized gain of $20,000 d) A $20,000 debit to Unrealized Gain on Investments 5. If a company is using the Fair Value Method of Accounting for Investments in Stock, which of the following gains and losses should they include in the company's Income Statement? a) Only unrealized gains and realized losses b) Only realized gains and realized losses c) All recognized gains and unrealized losses. d) All unrealized losses and unrealized gains 6. In 2019, Parent Company invested $8,500,000 in Subsidiary Company representing a 30% interest in Subsidiary Company's common stock. During the year, Subsidiary Company reports income of $700,000 and pays dividends of $50,000. The market value of Subsidiary Company at year-end is $8,275,000. Parent Company has no other investments in common stock. What effect would these transactions have on Parent Company's account - Investment in Common Stock - Subsidiary Company? (Parent Company use the Equity Method of accounting for this transaction) a) The net balance in the account would decrease by $195.000 b) The balance in the account would increase by $195.000 c) The balance would increase by $210.000. d) The net balance would decrease by $225,000. On July 1, 2019, Techno Inc. purchased/invested $500,000 face value PJ Morgan's 4% bonds due on July 1, 2029. The bonds pay interest semi- annually on January 1 and July 1. The bonds were purchased at a discount for $450,000 and provide a yield of 5%. natermine the total amount of interest revenue that Techno should report on its December 31, 2019 income statement a) $20,000 b) $18,000 c) $22,500 d) $11.250 Micron Corp. has excess cash in its checking account and has decided that it's time to invest in stocks. They purchased 16,500 shares of Lift at $55.50 per share plus broker's fees for $220. How should Micron account for the $220 broker's fees? a) Record the fees as Investment Expenses - Income Statement b) Record the fees in the Securities Fair Value Adjustment account c) Record the fees as a debit to Investments in Common Stock d) Record the fees as a credit to Investments in Common Stock 9. Fulton Construction began work in 2019 on a construction project with a contract price of $7,500,000. Other details: Costs incurred to date Estimated costs to complete, as of December 31 Billings to date Cash Collections to date 2019 $1,600,000 4.800,000 1,400,000 1,200,000 2020 $3,840,000 2,560,000 4,800,000 3,850,000 Assume that Fulton uses the percentage-of-completion method of accounting, what should Fulton recognize as Profit for the year 2020? a. $385,000 b. $660,000 C. $275,000 d. $0 10. During the 4th quarter 2019 holiday season, Masey's recorded $100M in sales. Included in the $100M was $72M of gift card sales. Of the $72M in gift card sales, consumers purchased merchandise for $8.5M prior to yearend December 31, 2019. Under current accounting rules, what is Masey's recognized revenue for the 4th quarter 2019? a) $28,000,000 b) $36,500,000 c) $8,500,000 d) $80.500.000 An unrealized holding loss on a company's Investments classified as Available-for-Sale Debt Securities should be reflected in the financial statements as: a) As a debit to the Securities Fair Value Adjustment Account. b) As a component of Stockholders' Equity-unrealized loss. c) A realized loss in the Income Statement. d) A recognized loss in the Income Statement. 2. In 2019, Delta Inc. entered into a 3-year construction project with the town of Cicero. The following data was extracted from Delta's books for the year ended 2020. (Delta uses the Completed Contract method of accounting) Contract Price Cost incurred to date Estimated costs to complete Billings on construction $12.0M 3.OM 6.OM 2.6M What amount of Revenue should Delta recognize in 2020? a) $12,000,000 b) $0 c) $4,000,000 d) Cannot be determined 00 000 of goods to Kelly Wholesalers less a Ang best reflects the proper $500,000 credit Sales Discounts for 3. Baxter Manufacturing sold $500,000 of goods to Kelly Wholesa trade discount of 10%. Which of the following best reflects th accounting treatment for Baxter? a) Debit Accounts Receivable for $500,000 credit Sales $50,000 and credit Sales for $450,000 sales for $500,000 and Unearned Revenue for $50.00 b) Credit sales for $500,000 and Unearned c) Debit Accounts Receivable for $450,000 di Debit Accounts Receivable for $500,000 and cred discounts $50,000. 500,000 and credit Allowance for Trade 4. On December 31, 2019, Acme reported Investments in Stock - cost $180,000. The fair value of the securities on this date is $200,000. Using fair value accounting, what would be the proper adjustment to reflect the change in fair market value of Acme's investments? a) A $20,000 debit to the Fair Value Adjustment Account b) Unrealized gain of $20,000 - Equity c) Realized gain of $20,000 d) A $20,000 debit to Unrealized Gain on Investments 5. If a company is using the Fair Value Method of Accounting for Investments in Stock, which of the following gains and losses should they include in the company's Income Statement? a) Only unrealized gains and realized losses b) Only realized gains and realized losses c) All recognized gains and unrealized losses. d) All unrealized losses and unrealized gains 6. In 2019, Parent Company invested $8,500,000 in Subsidiary Company representing a 30% interest in Subsidiary Company's common stock. During the year, Subsidiary Company reports income of $700,000 and pays dividends of $50,000. The market value of Subsidiary Company at year-end is $8,275,000. Parent Company has no other investments in common stock. What effect would these transactions have on Parent Company's account - Investment in Common Stock - Subsidiary Company? (Parent Company use the Equity Method of accounting for this transaction) a) The net balance in the account would decrease by $195.000 b) The balance in the account would increase by $195.000 c) The balance would increase by $210.000. d) The net balance would decrease by $225,000. On July 1, 2019, Techno Inc. purchased/invested $500,000 face value PJ Morgan's 4% bonds due on July 1, 2029. The bonds pay interest semi- annually on January 1 and July 1. The bonds were purchased at a discount for $450,000 and provide a yield of 5%. natermine the total amount of interest revenue that Techno should report on its December 31, 2019 income statement a) $20,000 b) $18,000 c) $22,500 d) $11.250 Micron Corp. has excess cash in its checking account and has decided that it's time to invest in stocks. They purchased 16,500 shares of Lift at $55.50 per share plus broker's fees for $220. How should Micron account for the $220 broker's fees? a) Record the fees as Investment Expenses - Income Statement b) Record the fees in the Securities Fair Value Adjustment account c) Record the fees as a debit to Investments in Common Stock d) Record the fees as a credit to Investments in Common Stock 9. Fulton Construction began work in 2019 on a construction project with a contract price of $7,500,000. Other details: Costs incurred to date Estimated costs to complete, as of December 31 Billings to date Cash Collections to date 2019 $1,600,000 4.800,000 1,400,000 1,200,000 2020 $3,840,000 2,560,000 4,800,000 3,850,000 Assume that Fulton uses the percentage-of-completion method of accounting, what should Fulton recognize as Profit for the year 2020? a. $385,000 b. $660,000 C. $275,000 d. $0 10. During the 4th quarter 2019 holiday season, Masey's recorded $100M in sales. Included in the $100M was $72M of gift card sales. Of the $72M in gift card sales, consumers purchased merchandise for $8.5M prior to yearend December 31, 2019. Under current accounting rules, what is Masey's recognized revenue for the 4th quarter 2019? a) $28,000,000 b) $36,500,000 c) $8,500,000 d) $80.500.000