Set of Accounting questions within. Negotiable price

3. On September 12 of Year 1, Rosie Company purchased land, a building,and some equipment for a total price of $450,000. The land, building,and equipment were appraised at $240,000, $180,000, and $80,000,respectively. At what amount should Rosie Company record the building? $180,000 $150,000 $130,000 $216,000 The following error must have been performed to come up with this choice: $216,000 = 240,000 * 0.90. $162,000 $72,000 Score: 0 of 1 5. Frodo Enterprises owns equipment located in Middle Earth. The cost and the accumulated depreciation of the equipment are $2,800,000 and $1,300,000, respectively. Because of a changing political environment, management is concerned that the equipment has become impaired. Management hired several independent appraisers who agreed that the current value of the equipment is $900,000. Management also estimates that the equipment will generate cash inflows of $80,000 per year for the next 20 years. Currently, the equipment is recorded in Frodo's accounting records at a net book value of $1,500,000 ($2,800,000 - $1,300,000). After this re-examination of the equipment,which ONE of the following is the appropriate accounting action? Do not recognize an asset impairment loss; continue to report the asset at a net book value of $1,500,000. Recognize an asset impairment loss; the asset should be recorded at $900,000. Recognize an asset impairment loss; the asset should be recorded at $1,500,000. This choice is incorrect because it assumes the asset is impaired but should still continue to be reported at the net book value: $1,500,000. Recognize an asset impairment loss; the asset should be recorded at $1,600,000. Recognize an asset impairment loss; the asset should be recorded at $2,400,000. Recognize an asset impairment loss; the asset should be recorded at $2,500,000. 1. At the beginning of Year 1, Jimbo Company purchased a portfolio of trading securities for $65. At the end of Year 1, the portfolio had a value of $52. In the middle of Year 2, the entire portfolio is sold for $74. What is the amount of unrealized gain or loss for Year 2? $13 unrealized gain $13 unrealized loss $9 unrealized gain $9 unrealized loss $22 unrealized gain This choice is incorrect because$22 (13 + 9) is the total economic gain during the year. $22 unrealized loss no unrealized gain or unrealized loss Score: 0 of 1 2. On February 14 of Year 1, Wishbone Corporation purchased 1,000 shares of Clarke Corporation common stock at $15 per share. Wishbone classified the investment in Clarke common stock as available for sale. On December 31 of Year 1, each share of Clarke common stock had a market value of $20. On April 26 of Year 2 Wishbone sold the 1,000 shares of Clarke common stock for $12 per share. The journal entry to record Wishbone's sale of the Clarke common stock includes a DEBIT to Unrealized Loss for $5,000. DEBIT to Market Adjustment for $5,000. DEBIT to Realized Loss for $3,000. DEBIT to Realized Loss for $8,000. DEBIT to Unrealized Loss for $8,000. DEBIT to Unrealized Decrease in Value of Securities for $8,000. The following error must have been performed to come up with this choice: $8,000 = ($20 - $12) x 1,000 shares. Two problems:this amount represents total change in the market price during Year 2, which does not equal the realized loss; and, any entry to record an unrealized decrease in value of securities would occur as a year end adjusting entry for the entire portfolio, not at the time of sale. Score: 0 of 1 3. At the beginning of Year 1, Scotto Company purchased a portfolio of available-for-sale securities for $27. None of the available-for-sale securities were sold during the year. At the end of Year 1, the available-for-sale portfolio had a value of $34. Also at the beginning of Year 1, Scotto Company purchased a portfolio of trading securities for $13. None of the trading securities were sold during the year. At the end of Year 1, the trading portfolio had a value of $9. For Year 1, Scotto's net income (before including any gains or losses from investment securities) was $232. After including any necessary gains or losses from investment securities, what is Scotto's correct net income for Year 1? Note: Ignore any income tax impact. $232 $252 $248 $228 $212 $216 The following error must have been performed to come up with this choice: $216 = 232 - 7 - 9 = Net income (before gains/losses from securities) - market adjustment for available-for-sale securities' portfolio - market value of trading securities' portfolio. Score: 0 of 1 4. On January 1 of Year 1, Lily Company issued bonds with a coupon rate of 7% and a face amount of $3,000. The bond interest payments are made twice each year on June 30 and on December 31. The bonds mature in 12 years. The market interest rate for bonds with the same degree of riskiness is 10% compounded semi-annually. On January 1 of Year 1,Investor Company purchased all of the Lily Company bonds when they were issued. Investor Company has classified this investment in bonds as a held-to-maturity investment. What is the total amount of interest revenue that Investor Company will report in Year 1 in connection with this bond investment? Of course, Investor Company uses the effective interest amortization method. Note: Round all of your calculations to the nearest penny. $237.90 The following error must have been performed to come up with this choice: $237.90 = 238.60 + 13.95 - 14.65. $28.60 $620.94 $62.09 $210.00 $238.60 Score: 0 of 1 5. On January 1 of Year 1, Taraz Company purchased 4,500 shares of the common stock of Company A for $337,500. At the time, Company A had atotal of 11,250 common shares outstanding. Accordingly, Taraz purchased 40% of the outstanding shares of Company A. During Year 1, Company Apaid cash dividends totaling $35,000. Company A also reported net income of $75,000 during Year 1. On December 31 of Year 1, the market value of Company A's common stock was $70 per share. On Taraz Company's books,what amount should be reported as \"Investment in Company A\" as of December 31 of Year 1? $353,500 $315,000 $331,000 $377,500 $367,500 $337,500 The following error must have been performed to come up with this choice: $337,500 = acquisition price. 2. On January 1 of Year 1, Mellie Company issued a $25,000, 12% bond, at face value. Interest is paid annually each January 1, so the first coupon payment was made on January 1 of Year 2. Mellie uses the effective-interest method on its books. The entry related to this bond on December 31 of Year 1 would include which of the following? a debit to Interest Receivable of $3,000 a credit to Interest Expense of $3,000 a debit to Interest Revenue of $3,000 This choice is incorrect because we are not receiving interest and recognizing revenue we are paying interest and recognizing an expense. a credit to Cash of $3,000 a credit to Interest Payable of $3,000 a debit to Cash of $3,000 No entry is necessary on December 31 of Year 1. Score: 0 of 1 3. Ryan Company issued bonds with a coupon rate of 8% and a face amount of $5,000. The bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is 12% compounded semi-annually.These bonds were issued on January 1 of Year 1. Coupon payments are made every six months on June 30 and on December 31, so the first coupon payment was made on June 30 of Year 1. Ryan uses the effective-interest method on its books. What was the issuance price of these bonds on January 1 of Year 1? $5,000 The following error must have been performed to come up with this choice: $5,000 = face value of the bonds. $1,778 $2,276 $3,624 $3,638 $2,748 Score: 0 of 1 4. On January 1 of Year 1, Lily Company issued a $20,000, 15% bond, at face value. Interest is paid annually each December 31, so the first coupon payment was made on December 31 of Year 1. This bond was retired on January 1 of Year 2,just one day after the first coupon payment was made. The total amount paid to retire this bond was $18,500. Lily uses the effective-interest method on its books. The entry to record the retirement of this bond would include which of the following? a credit to Bonds Payable of $20,000 a credit to Cash of $20,000 a debit to Discount on Bonds of $1,500 a credit to Discount on Bonds of $1,500 This choice is incorrect because they assume that the bond had a discount or premium to be amortized. a credit to Gain on Bond Retirement of $1,500 a credit to Premium on Bonds of $1,500 a debit to Premium on Bonds of $1,500 a debit to Loss on Bond Retirement of $1,500 Score: 0 of 1 5. Tarazi Company issued bonds with a coupon rate of 10% and a face amount of $200,000. The bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is 8% compounded annually. These bonds were issued on January 1 of Year 1 at a price of$234,238. Coupon payments are made annually on December 31, so the first coupon payment was made on December 31 of Year 1. Tarazi uses the effective-interest method on its books. The journal entry to record the second coupon payment made on December 31 of Year 2includes which of the following? a debit to Interest Expense of $20,000 a debit to Interest Expense of $18,739 The following error must have been performed to come up with this choice: $18,739= First year Interest Expense. a debit to Premium on Bonds of $1,362 a credit to Discount on Bonds of $1,261 a debit to Premium on Bonds of $18,638 a debit to Premium on Bonds of $1,261 f