c1 Company issued 100,000 shares of $5 par value common stock for $38 per share. How would Mendy report this transaction in the Stockholders Equity section of the Balance Sheet?

They would increase Common Stock for $3,800,000.

They would increase Additional Paid-in Capital for $500,000 and increase Common Stock for $3,300,000.

They would increase Common Stock by $500,000 and increase Additional Paid-in Capital by $3,300,000.

They would increase Common Stock by $500,000 and decrease the Additional Paid in Capital account by $3,300,000.

January 14, 2015, rick Company purchased the $300,000, 6% face-value bonds of Barney Company for $309,000. rick planned to hold the bonds for several years, but not until their maturity. On December 31, 2015, the bonds had a market value of $306,500. Where would rick Company report the unrealized holding gain or loss on this investment as of December 31, 2015?

In the Other gain/loss section of the Income Statement

In the Accumulated Other Comprehensive Income section of the Balance Sheet

On the Statement of Retained Earnings.

None of these answers are correct.

An investment in which type of security will require a reclassification adjustment to back out any previously-recognized gains or losses when the security is sold?

Investments in equity securities

Investments in debt securities classified as Trading securities

Investments in debt securities classified as Available-for-Sale.

Investments in debt securities classified as Held-to-Maturity.

All of these answers are correct.

Which of the following is a limitation of consolidated financial statements?

Consolidated financial can mask the performance of weaker companies.

Ratios and percentages derived from consolidated financial statements can be deceptive because they are composite (weighted) averages.

Consolidated statements can eliminate detail about product lines, divisional operations, and the relative profitability of various business segments

Answers a and b only

All of these are limitations of consolidated financial statements.

On March 15, 2015, keith Company purchased 60,000 of the 200,000 (which is 30%) of the outstanding shares of keith Company stock for $11.50 per share. On June 30, 2017, keith paid an $80,000 dividend to its shareholders. On December 31, 2015, keith declared net income of $420,000. The fair value of keith's stock was $13.75 per share on December 31, 2017. At what amount will Walker report its investment in Hurtado Company stock on its December 31, 2017 balance sheet?

$736,000

$792,000

$825,000

$1,030,000

None of these answers are correct