Acct 405

1.| Question:| (TCO 1) Luffman Inc. owns 30% of Bruce Inc. and appropriately applies the equity method. During the veritable year, Bruce bought scrutinise costing $52,000 and then sold it to Luffman for $80,000. At year-end, all of the production had been sold by Luffman to other customers. What amount of unrealized inter-company mesh must be deferred by Luffman?|
| Your Answer:| | | $0| | castigate|
| | $8,400| | |
| | $28,000| | |
| | $52,000| | |
| | $80,000| | |
|
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| Points have:| 2 of 2 |
| Comments:| |
2.| Question:| (TCO 1) Which of the following results in a decrease in the Equity in Investee Income grudge when applying the equity method?|
| Your Answer:| | | Dividends paid by the investor| | |
| | last(a) income of the investee| | INCORRECT|
| | Unrealized gain on inter-company inventory transfers for the current year| | CORRECT ANSWER|
| | Unrealized gain on inter-company inventory transfers for the prior year| | |
| | Extraordinary gain of the investee| | |
|
|
| Points Received:| 0 of 2 |
| Comments:| |
3.| Question:| (TCO 1) In a detail where the investor exercises significant influence over the investee, which of the following entries is not really posted to the books of the investor?




1) Debit to the Investment account and a book of facts to the Equity in Investee Income account.
2) Debit to Cash (for dividends received from the investee) and a recognition to Dividend Revenue.
3) Debit to Cash (for dividends received from the investee) and a Credit to the Investment account.|
| Your Answer:| | | Entries 1 and 2| | INCORRECT|
| | Entries 2 and 3| | |
| | Entry 1 but| | |
| | Entry 2 only| | CORRECT ANSWER|
| | Entry 3 only| | |
|
|
| Points Received:| 0 of 2 |
| Comments:| |
4.| Question:| (TCO 1) On January 1, 2006, Dermot gild purchased 15% of the voting common stock of Horne...If you want to lend a full essay, order it on our website: Orderessay



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