In: Accounting
MC Qu. 99 A company had net income...
A company had net income of $2,690,000, net sales of $25,200,000, and average total assets of $8,400,000. Its return on total assets equals:
Multiple Choice
-312.27%.
-33.33%.
-10.67%.
-32.02%.
-3.12%.
MC Qu. 109 Carpark Services...
Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X1 is:
Available-for-Sale Securities | Cost | Fair Value | |||
December 31, 20X1 | $ | 275,000 | $ | 261,000 | |
December 31, 20X2 | $ | 360,000 | $ | 376,500 | |
December 31, 20X3 | $ | 430,000 | $ | 475,000 | |
Multiple Choice
-Debit Unrealized Loss – Equity $14,000; Credit Fair Value Adjustment – Available-for-Sale (LT) $14,000.
-Debit Unrealized Gain– Equity $14,000; Credit Fair Value Adjustment – Available-for-Sale (LT) $14,000.
-Debit Fair Value Adjustment – Available-for-Sale (LT) $14,000; Credit Unrealized Loss – Equity $14,000.
-Debit Fair Value Adjustment – Available-for-Sale (LT) $14,000; Credit Unrealized Gain – Equity $14,000.
-Debit Unrealized Loss – Income $14,000; Credit Fair Value Adjustment – Available-for-Sale (ST) $14,000.
MC Qu. 145 On February 15, Jewel Company buys...
On February 15, Jewel Company buys 8,500 shares of Marcelo Corp. common stock at $29.13 per share plus a brokerage fee of $400. The stock is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.20 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $30.10 per share less a brokerage fee of $250. The balance in the investment account on April 16 is:
Multiple Choice
-$248,005.
-$237,805.
-$247,605.
-$237,405.
-$237,555.
MCQ 99. 32.02%
MCQ 109 Option A
-----------------------------------------------------------------------------------------------------------------------
Return on assets is the ratio of annual net income to average total assets of a business during a financial year. It measures efficiency of the business in using its assets to generate net income. It is a profitability ratio.
ROA = Net Income/ Average asset
ROA = 2690000/ 8400000
ROA = 0.3202 or 32.02% (Correct option is D)
-----------------------------------------------------------------------------------------------------------------------
Unrealized loss = Cost – Fair value
= 275000 – 261000
= (14000)
Correct journal entry will be
Debit Unrealized Loss – Equity $14,000; Credit Fair Value Adjustment – Available-for-Sale (LT) $14,000.
Correct option is A.
-----------------------------------------------------------------------------------------------------------------------
Hope this answer your query.
Pls rate this solution if you found it useful.