MC Qu. 132 On November 12, Higgins...

On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 1,670,000 yen. The exchange rate was $.00854 per yen on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $.00860. Kagome paid in full on January 12, when the exchange rate was $.00878. On December 31, Higgins should prepare the following journal entry:

Multiple Choice

-Debit Foreign Exchange Loss $100; Accounts Receivable-Kagome $100.

-Debit Foreign Exchange Loss $100; credit Sales $100.

-Debit Sales $100; credit Foreign Exchange Gain $100.

-Debit Accounts Receivable-Kagome $100; credit Foreign Exchange Gain $100.

-No journal entry is required until the amount is collected.

MC Qu. 119 MotorCity, Inc. purchased...

MotorCity, Inc. purchased 59,000 shares of Shaw common stock for $270,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:

Multiple Choice

-Debit to Long-Term Investments for $4,968,000.

-Credit to Long-Term Investments for $4,968,000.

-Debit to Long-Term Investments for $270,000.

-Debit to Short-Term Investment-AFS for $270,000.

-Debit to Long-Term Investments-HTM for $270,000.

MC Qu. 123 Marjam Company owns...

Marjam Company owns 51,600 shares of MacKenzie Company's 120,000 outstanding shares of common stock. MacKenzie Company pays $120,000 in total cash dividends to its shareholders. Marjam's entry to record this transaction should include a:

Multiple Choice

-Debit to Interest Revenue for $14,190.

-Credit to Long-Term Investments for $33,000.

-Credit to Long-Term investments for $51,600.

-Credit to Dividend Revenue for $33,000.

-Debit to Dividend Revenue for $14,190.