debt investments that are held to maturity are recorded at original cost fair value 242379

Debt investments that are held to maturity are recorded at original cost. fair value. maturity value. amortized cost Which of the following is the correct matching concerning an investor’s influence on the operations and financial affairs of an investee? % of Investor Ownership Presumed Influence Between 20%-50% Significant Between 20%-50% Controlling More than 50% Long-term Less than 20% Short-term If one company owns more than 50% of the common stock of another company, a parent-subsidiary relationship exists. a partnership exists.

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Debt investments that are held to maturity are recorded at original cost. fair value. maturity value. amortized cost Which of the following is the correct matching concerning an investor’s influence on the operations and financial affairs of an investee? % of Investor Ownership Presumed Influence Between 20%-50% Significant Between 20%-50% Controlling More than 50% Long-term Less than 20% Short-term If one company owns more than 50% of the common stock of another company, a parent-subsidiary relationship exists. a partnership exists. the cost method should be used to account for the investment. the company whose stock is owned must be liquidated. Under the equity method, the investor records dividends received by crediting Revenue from Investment. Dividend Revenue. Stock Investments. Investment Income. Under the equity method, the Stock Investments account is credited when the investment is originally acquired. investee reports net income and when the investment is originally acquired. investee reports net income. investee reports a net loss. Laramie industries owns 45% of McCook Company. For the current year, McCook reports net income of $250,000 and declares and pays a $60,000 cash dividend. Which of the following correctly presents the journal entries to record Laramie’s equity in McCook’s net income and the receipt of dividends from McCook? Dec. 31 Stock Investments 112,500 Revenue from Stock Investments 112,500 Dec. 31 Cash 60,000 Stock Investments 60,000 Dec. 31 Stock Investments 85,500 Revenue from…

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