DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
v v v v v v v v v
Advanced Accounting 14th Hoyle Chapter 01
v v v v v
Correct answers are located at the 2nd half this document
v v v v v v v v v
MULTIPLEvCHOICEv-
vChoosevthevonevalternativevthatvbestvcompletes vthevstatementvorvanswersvthevquestion.
1) BakervCompanyvownsv15%vofvthevcommonvstockvofvCharlievCorporationvandvusedvthevf
air-
valuevmethodvtovaccountvforvthisvinvestment.vCharlievreportedvnetvincomevofv$120,000vforv2021v
andvpaidvdividendsvofv$70,000vonvOctoberv1,v2021.vHowvmuchvincomevshouldvBakervrecognize
vonvthisvinvestment vinv2021?
1) v
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
02vDescribevinvgeneralvthevvariousvmethodsvofvaccountingvforvanvinvestmentvinvGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatible
Topicv:vAccountingvforvInvestments―VariousvMethods
2) LoefflervCompanyvownsv35%vofvthevcommonvstockvofvTettervCo.vandvusesvthevequityvmeth
odvtovaccountvforvthevinvestment.vDuringv2021,vTettervreportedvincomevofv$260,000vandvpaidvdivide
ndsvofv$90,000.vTherevisvnovamortizationvassociatedvwithvthevinvestment.vDuringv2021,v howvmuchv
incomevshouldvLoefflervrecognizevrelatedvtovthisvinvestment?
2)v
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,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
v v v v v v v v v
Advanced Accounting 14th Hoyle Chapter 01
v v v v v
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
04vDescribevthevfinancialvreportingvforvequityvmethodvinvestmentsvandvpreparevGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatiblevTopicv:vEquityv
Method―BasicvJournalvEntries
3) OnvJanuaryv1,v2021,vLeevCompanyvpaidv$1,870,000vforv80,000vsharesvofvThomasvCo.’svvot
ingvcommonvstockvwhichvrepresentsvav45%vinvestment.vNovallocationvtovgoodwillvorvothervspecific
vaccount vwasvnecessary. vSignificant vinfluencevovervThomasvwasvachievedvbyvthisvacquisition.vTho
masvdistributedvavdividendvofv$2.00vpervsharevduringv2021vandvreportedvnetvincomevofv$720,000.v
WhatvwasvthevbalancevinvthevInvestmentvinvThomasvCo.vaccountvfoundvinvthevfinancialvrecordsvofvLe
evasvofvDecemberv31,v2021?
3)v
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
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,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
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Advanced Accounting 14th Hoyle Chapter 01
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QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
04vDescribevthevfinancialvreportingvforvequityvmethodvinvestmentsvandvpreparevGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatible
Topicv:vEquityvMethod―InvestmentvAccountvBalance
4) Avnecessaryvconditionvtovusevthevequityvmethodvofvreportingvforvanvequityvinvestmentvisvt
hatvthevinvestorvcompanyvmust
4)v
A) havevthevabilityvtovexercisevsignificantvinfluencevovervthevoperatingvandvfinancialv
policiesvofvthevinvestee.
B) ownvatvleastv30%vofvthevinvestee'svvotingvstock.
C) possessvavcontrollingvinterestvinvthevinvestee'svvotingvstock.
D) notvhavevthevabilityvtovexercisevsignificantvinfluencevovervthevoperatingvandvfinancialv
policiesvofvthevinvestee.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
Bloom'sv:vRemember
AACSBv:vReflectivevThinking
LearningvObjectivev:v01-
03vIdentifyvthevsolevcriterionvforvapplyingvthevequityvmethodvofvaccountingvavGradablev:vautomatic
Difficultyv:v1vEasy
Accessibilityv:vScreenvReadervCompatible
Topicv:vEquityvMethod―SignificantvInfluencevCriterion
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Advanced Accounting 14th Hoyle Chapter 01
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5) OnvJanuaryv1,v2019,vDermotvCompanyvpurchasedv15%vofvthevvotingvcommonvstockvofvH
ornevCorp.vOnvJanuaryv1,v2021,vDermotvpurchasedv28%vofvHorne’svvotingvcommonvstock.vIfvDe
rmotvachievesvsignificantvinfluencevwithvthisvnewvinvestment,vhowvmustvDermotvaccountvforvthev
changevtovthevequityvmethod?
5)v
A) Itvmustvusevthevequityvmethodvforv2021vbutvshouldvmakevnovchangesvinvitsvfinancialvs
tatementsvforv2020vandv2019.
B) Itvshouldvpreparevconsolidatedvfinancialvstatementsvforv2021.
C) Itvmustvrestatevthevfinancialvstatementsvforv2020vandv2019vasvifvthevequityvmethodvhadvb
eenvusedvforvthosevtwovyears.
D) Itvshouldvrecordvavpriorvperiodvadjustmentvatvthevbeginningvofv2021vbutvshouldvnotvr
estatevthevfinancialvstatementsvforv2020vandv2019.
E) Itvmustvrestatevthevfinancialvstatementsvforv2020vasvifvthevequityvmethodvhadvbeenvu
sedvthen.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
Bloom'sv:vUnderstand
LearningvObjectivev:v01-
06avUnderstandvthevfinancialvreportingvconsequencesvforvavchangevtovthevequitvGradablev:vautomatic
Difficultyv:v2vMediumvAACS
Bv:vAnalyticalvThinking
Topicv:vReportvChangevtovEquityvMethodvAcc
essibilityv:vScreenvReadervCompatible
6) DuringvJanuaryv2020,vNelson,vInc.vacquiredv30%vofvthevoutstandingvcommonvstockvofv
FuelvCo.vforv$1,600,000.vThisvinvestmentvgavevNelsonvthevabilityvtovexercisevsignificantvinflue
ncevovervFuel.vFuel’svassetsvonvthatvdatevwerevrecordedvatv$7,200,000vwithvliabilitiesvof
$3,400,000.vAnyvexcessvofvcostvovervbookvvaluevofvNelson’svinvestmentvwasvattributedvtovu
nrecordedvpatentsvhavingvavremainingvusefulvlifevofvtenvyears.
Inv2020,vFuelvreportedvnetvincomevofv$650,000.vForv2021,vFuelvreportedvnetvincomevof
$800,000.vDividendsvofv$250,000vwerevpaidvinveachvofvthesevtwovyears.vWhatvwasvthevreportedvbalancev
ofvNelson’svInvestmentvinvFuelvCo.vatvDecemberv31,v2021?
6)v
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v v v v v v v v v
Advanced Accounting 14th Hoyle Chapter 01
v v v v v
Correct answers are located at the 2nd half this document
v v v v v v v v v
MULTIPLEvCHOICEv-
vChoosevthevonevalternativevthatvbestvcompletes vthevstatementvorvanswersvthevquestion.
1) BakervCompanyvownsv15%vofvthevcommonvstockvofvCharlievCorporationvandvusedvthevf
air-
valuevmethodvtovaccountvforvthisvinvestment.vCharlievreportedvnetvincomevofv$120,000vforv2021v
andvpaidvdividendsvofv$70,000vonvOctoberv1,v2021.vHowvmuchvincomevshouldvBakervrecognize
vonvthisvinvestment vinv2021?
1) v
A) $18,000.
B) $10,500.
C) $28,500.
D) $7,500.
E) $50,000.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
02vDescribevinvgeneralvthevvariousvmethodsvofvaccountingvforvanvinvestmentvinvGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatible
Topicv:vAccountingvforvInvestments―VariousvMethods
2) LoefflervCompanyvownsv35%vofvthevcommonvstockvofvTettervCo.vandvusesvthevequityvmeth
odvtovaccountvforvthevinvestment.vDuringv2021,vTettervreportedvincomevofv$260,000vandvpaidvdivide
ndsvofv$90,000.vTherevisvnovamortizationvassociatedvwithvthevinvestment.vDuringv2021,v howvmuchv
incomevshouldvLoefflervrecognizevrelatedvtovthisvinvestment?
2)v
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,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
v v v v v v v v v
Advanced Accounting 14th Hoyle Chapter 01
v v v v v
A) $90,000.
B) $91,000.
C) $122,500.
D) $31,500.
E) $59,500.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
04vDescribevthevfinancialvreportingvforvequityvmethodvinvestmentsvandvpreparevGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatiblevTopicv:vEquityv
Method―BasicvJournalvEntries
3) OnvJanuaryv1,v2021,vLeevCompanyvpaidv$1,870,000vforv80,000vsharesvofvThomasvCo.’svvot
ingvcommonvstockvwhichvrepresentsvav45%vinvestment.vNovallocationvtovgoodwillvorvothervspecific
vaccount vwasvnecessary. vSignificant vinfluencevovervThomasvwasvachievedvbyvthisvacquisition.vTho
masvdistributedvavdividendvofv$2.00vpervsharevduringv2021vandvreportedvnetvincomevofv$720,000.v
WhatvwasvthevbalancevinvthevInvestmentvinvThomasvCo.vaccountvfoundvinvthevfinancialvrecordsvofvLe
evasvofvDecemberv31,v2021?
3)v
A) $2,114,000.
B) $2,194,000.
C) $2,354,000.
D) $2,158,000.
E) $2,034,000.
Versionv1 2
mynursytest.store
,DOWNLOAD THE Test Bank for Advanced Accounting 14th Edition Hoyle
v v v v v v v v v
Advanced Accounting 14th Hoyle Chapter 01
v v v v v
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
Bloom'sv:vApply
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
LearningvObjectivev:v01-
04vDescribevthevfinancialvreportingvforvequityvmethodvinvestmentsvandvpreparevGradablev:vautomatic
Difficultyv:v3vHard
AACSBv:vKnowledgevApplicationvAccessibilit
yv:vScreenvReadervCompatible
Topicv:vEquityvMethod―InvestmentvAccountvBalance
4) Avnecessaryvconditionvtovusevthevequityvmethodvofvreportingvforvanvequityvinvestmentvisvt
hatvthevinvestorvcompanyvmust
4)v
A) havevthevabilityvtovexercisevsignificantvinfluencevovervthevoperatingvandvfinancialv
policiesvofvthevinvestee.
B) ownvatvleastv30%vofvthevinvestee'svvotingvstock.
C) possessvavcontrollingvinterestvinvthevinvestee'svvotingvstock.
D) notvhavevthevabilityvtovexercisevsignificantvinfluencevovervthevoperatingvandvfinancialv
policiesvofvthevinvestee.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
Bloom'sv:vRemember
AACSBv:vReflectivevThinking
LearningvObjectivev:v01-
03vIdentifyvthevsolevcriterionvforvapplyingvthevequityvmethodvofvaccountingvavGradablev:vautomatic
Difficultyv:v1vEasy
Accessibilityv:vScreenvReadervCompatible
Topicv:vEquityvMethod―SignificantvInfluencevCriterion
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Advanced Accounting 14th Hoyle Chapter 01
v v v v v
5) OnvJanuaryv1,v2019,vDermotvCompanyvpurchasedv15%vofvthevvotingvcommonvstockvofvH
ornevCorp.vOnvJanuaryv1,v2021,vDermotvpurchasedv28%vofvHorne’svvotingvcommonvstock.vIfvDe
rmotvachievesvsignificantvinfluencevwithvthisvnewvinvestment,vhowvmustvDermotvaccountvforvthev
changevtovthevequityvmethod?
5)v
A) Itvmustvusevthevequityvmethodvforv2021vbutvshouldvmakevnovchangesvinvitsvfinancialvs
tatementsvforv2020vandv2019.
B) Itvshouldvpreparevconsolidatedvfinancialvstatementsvforv2021.
C) Itvmustvrestatevthevfinancialvstatementsvforv2020vandv2019vasvifvthevequityvmethodvhadvb
eenvusedvforvthosevtwovyears.
D) Itvshouldvrecordvavpriorvperiodvadjustmentvatvthevbeginningvofv2021vbutvshouldvnotvr
estatevthevfinancialvstatementsvforv2020vandv2019.
E) Itvmustvrestatevthevfinancialvstatementsvforv2020vasvifvthevequityvmethodvhadvbeenvu
sedvthen.
QuestionvDetails
Accessibilityv:vKeyboardvNavigationv
AICPAv:vBBvCriticalvThinkingvAICP
Av:vFNvMeasurement
Bloom'sv:vUnderstand
LearningvObjectivev:v01-
06avUnderstandvthevfinancialvreportingvconsequencesvforvavchangevtovthevequitvGradablev:vautomatic
Difficultyv:v2vMediumvAACS
Bv:vAnalyticalvThinking
Topicv:vReportvChangevtovEquityvMethodvAcc
essibilityv:vScreenvReadervCompatible
6) DuringvJanuaryv2020,vNelson,vInc.vacquiredv30%vofvthevoutstandingvcommonvstockvofv
FuelvCo.vforv$1,600,000.vThisvinvestmentvgavevNelsonvthevabilityvtovexercisevsignificantvinflue
ncevovervFuel.vFuel’svassetsvonvthatvdatevwerevrecordedvatv$7,200,000vwithvliabilitiesvof
$3,400,000.vAnyvexcessvofvcostvovervbookvvaluevofvNelson’svinvestmentvwasvattributedvtovu
nrecordedvpatentsvhavingvavremainingvusefulvlifevofvtenvyears.
Inv2020,vFuelvreportedvnetvincomevofv$650,000.vForv2021,vFuelvreportedvnetvincomevof
$800,000.vDividendsvofv$250,000vwerevpaidvinveachvofvthesevtwovyears.vWhatvwasvthevreportedvbalancev
ofvNelson’svInvestmentvinvFuelvCo.vatvDecemberv31,v2021?
6)v
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