Question 9(Mandatory)(2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^stof Year 1 the market value of the stock is$44,000.

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Which of the following is true about the account "Valuation allowance for trading securities?"

Question 9 options:

The December 31st " Valuation allowance for trading securities" credit balance of $11,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.

The December 31st " Valuation allowance for trading securities" credit balance of $12,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.

There is no "Valuation allowance for trading securities" on the Balance Sheet because the "Valuation allowance for trading securities" belongs on the Income Statement.

The December 31st " Valuation allowance for trading securities" debit balance of $11,000 is added to the account "Trading securities (at cost)" on theDecember 31st Balance Sheet.

Question 10(Mandatory)(2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^stof Year 1 the market value of the stock is$44,000.

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On the company's 12/31 Balance Sheet, "Trading investments (at fair value)" will be reported as what value?

Question 10 options:

$44,000

$11,000

$55,000

$67,000

Question 11(Mandatory)(2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^stof Year 1 the market value of the stock is$44,000.

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On the company's 12/31 Balance Sheet, which value is consideredBook Valueof the trading securities?

Question 11 options:

$55,000

$44,000

$67,000

$11,000

Question 12(Mandatory)(2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^stof Year 1 the market value of the stock is$44,000.

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What is theIncome Statementimpact of these trading securities in the December 31st Year 1 Income Statement?

Question 12 options:

The unrealized loss of $44,000 is recognized on the Income Statement, reducing current period income by $44,000.

There is no impact of these trading securities on the company's Year 1 December 31st Income Statement,

The unrealized loss of $11,000 is recognized on the Income Statement, decreasing current period income by $11,000.

The unrealized gain of $11,000 is recognized on the Income Statement, increasing current period income by $11,000.

Current Liabilities

Question 13(Mandatory)(2.5 points)

Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

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What is the total interest (in dollars) which will accrue over the life of this note?

Question 13 options:

$40,840

$840

$2,800

$40,000

Question 14(Mandatory)(2.5 points)

Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

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What is the maturity value of the note?

Question 14 options:

$840

$40,840

$2,800

$40,000

Question 15(Mandatory)(2.5 points)

Jones, Inc. has an Account Payable of $40,000 which it cannot pay on time. Jones' vendor allows the company to replace the Accounts Payable with a 108-day, 7 percent, $40,000 interest-bearing note.

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Provide the journal entry Jones will record upon issuance of the note:

Question 15 options:

Dr. Accounts Payable $40,840

Cr. Note Payable $40,840

Dr. Accounts Payable $40,000

Cr. Note Payable $40,000

Dr. Notes Payable $40,000

Cr. Accounts Payable $40,000

Dr. Note Receivable $40,000

Cr. Note Payable $40,000