Question 16

Zink Company owns 32% of Ace Company's outstanding voting stock. Zink Company normally should account for its investment in Ace Company using the

		Fair value method.
		Cost method.
		Consolidation procedure.
		Equity method.

Question 17

Which characteristic is not possessed by intangible assets?

		Physical existence
		Long-lived
		Result in future benefits.
		Expensed over current and/or future years.

Question 18

Pacer Company purchased 300 of the 1,000 outstanding shares of Queen Company's common stock for $80,000 on January 2, 2019. During 2020, Queen Company declared dividends of $8,000 and reported earnings for the year of $20,000. If Pacer Company uses the equity method of accounting for its investment in Queen Company, its Investment in Queen Company account at December 31, 2020 should be

		$100, 000
		$88,000
		$83,600
		$80,000

Question 19

Under current GAAP, intangible assets are classified as

		Amortizable or unamortizable.
		Limited-life or indefinite-life
		Specifically, identifiable or unidentifiable
		Legally restricted or unrestricted

Question 20

A requirement for a security to be classified as held-to-maturity is

		Positive intent
		The security must be a debt security
		Ability to hold the security to maturity
		All of these are required.