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Parent Company owns stock in Subsidiary Company. The stock is traded on the NYSE and the London Stock Exchange. The stock price information is noted below:
Exchange Quoted Stock Price Transaction Cost Net New York $105 $1 $104 London $107 $5 $102
What is the fair value of Subsidiary Company if there is NO principal market for the stock?CorrectIncorrect
Gary, a consultant, keeps accounting records on a cash basis. In year 2, Gary collected $300,000 in fees from clients. At 12/31/Year 1, Gary had an accounts receivable of $50,000. At 12/31/Year 2, Gary had accounts receivable of $70,000, and unearned revenue of $6,000. If Gary used accrual basis, what would service revenue be for year 2?CorrectIncorrect
True or False: GAAP and Tax use the same rules for contributions partners make when forming a partnership.CorrectIncorrect
XYZ Corp. uses the aging of receivables method when calculating the estimated uncollectable amount. Use the below facts to determine the required amount in allowance account for accounts receivables.
Classifications by Due Date Balance in Category Estimated % Uncollectible Current $20,000 1% 31-60 Days $7,365 3% 61-90 Days $5,250 10% 90+ Days $1,375 20% $33,990 34%CorrectIncorrect
ABC Corp’s beginning inventory at January 1, Year 1 was understated by $32,000 and the ending inventory was overstated by $57,000. As a result, ABC Corp’s cost of goods sold for year 3 was:CorrectIncorrect
Salvage Value, also known as residual value, is:CorrectIncorrect
On September 1, Year 3, Bobcat Corp. sold land to Crystal Corp for $300,000. The initial cost of the land to Bobcat Corp was $275,000. Crystal Corp and Bobcat Corp are both subsidiaries of Courtside Corp. On the consolidated balance sheet, what would be the value of the land?CorrectIncorrect
Calculate the amount of depreciation in year 3 of the assets useful life assuming the following facts.
- Cost of asset $11,000
- Salvage Value $1,000
- Useful life is four years
- Sum of years digit method is used to calculate
An impairment loss is calculated for an asset held for use by the amount by which:CorrectIncorrect
Company A owns 15 % of Company B. Company A’s CEO is on the board of directors for Company B. What type of accounting method should be used for this investment?CorrectIncorrect