Multiple choice questions

In times of falling prices, choosing LIFO as an inventory cost method would affect the financial statements as follows. Cost of goods sold will be higher and ending inventory will be lower Cost of goods sold will be lower and ending inventory will be lower Cost of goods sold will be higher and ending inventory will be higher Cost of goods sold will be lower and ending inventory will be higher. Berlin Corporation purchases an investment in Best Pictures, Inc, at a purchase price of $3 million cash, representing 455 of the book value of Best Pictures. During the year, Best Pictures report net income of $350,000 and pays $90,000 of cash dividends. At the end of the year, the market value of Berlin's investment is $3.7 million. What is the year-end balance of the equity investment in Best Pictures? $3,000,000 $3, 117,000 $3, 157, 500 $3, 260,000 $3, 700,000 Principe holds a 10% equity investment in Del Fuego Inc. Clearwater Investments holds 40% of Del Fuego's stock. On April 1, 2015, Del Fuego declares and pays dividends to its stockholders. how will the dividend affect each company's balance sheet account: Del Fuego Investment? On June 1, 2014, Precious Metals Corp purchases 100% of Alberta Gold Company for $1.5 million. At the time of acquisition, the fair market value of Alberta Gold's tangible net assets (excluding goodwill) is $12 million. Precious Metals describes the excess of $300,000 to goodwill During the first half of the year, the fair value of Alberta Gold declines to $1. 2 million and the fair value of Alberta Gold's tangible net assets is estimated at $1.1 million as of December 31. 2014. This decline is deemed permanent. What impairment charge, if any, should Precious Metals report at December 31.2014 $0 $100.000 $200.000 $300.000 none of the above Which one of the following items is a not component of contributed capital? Preferred stock Retained earnings Common stock Additional paid-in capital All of the above Which of the following would not require the company to record an accrual on the balance sheet? The company owes $20,000 in wages to its employees for the previous two weeks Interest will be paid when a note payable matures in the following accounting period Management believes a lawsuit against the company is meritless because they have never had a single complaint about dangerous side effects of their drug in two years The company knows that they will be fined for pollution as a result of their manufacturing process and can estimate the amount of the obligation None of the above