Question & Answer: MULTIPLE CHOICE…..

MULTIPLE CHOICE

1. Nichols Enterprises has an investment in 26,000 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $16 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $18 per bond. Nichols should carry the Elliott investment on its balance sheet at:

Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: MULTIPLE CHOICE…..
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
Order Essay

a. $442,000, the midpoint of Nichols’ range of reasonably likely valuations of Elliott.

b. $468,000

c. $416,000

d. Either $416,000 or $468,000 as either are defensible valuations.

2. Zwick Company bought 22,500 shares of the voting common stock of Handy Corporation in January 2018. In December, Handy announced $206,200 net income for 2018 and declared and paid a cash dividend of $5 per share on all 207,000 shares of its outstanding common stock. Zwick Company’s dividend revenue from Handy Corporation in December 2018 would be:

a. $0

b. $22,413

c. $112,500

d. none of these answer choices are correct

3. Assume that, on January 1, 2018, Matsui Co. paid $2,244,000 for its investment in 74,800 shares of Yankee Inc. Further, assume that Yankee has 340,000 total shares of stock issued. The book value and fair value of Yankee’s identifiable net assets were both $680,000 at January 1, 2018. The following information pertains to Yankee during 2018:

Net Income $ 340,000
Dividends declared and paid $ 102,000
Market price of common stock on 12/31/2018 $ 32 /share

What amount would Matsui report in its year-end 2018 balance sheet for its investment in Yankee?

a. $2,686,000

b. $2,346,000

c. $ 2,296,360

d. none of these answer choices are correct

4. Nichols Corporation purchased $260,000 of Holly Inc. 8.0% bonds at par with the intent and ability to hold the bonds until they matured in 2022, so Nichols classifies its investment as held to maturity. Unfortunately, a combination of problems at Holly and in the debt market caused the fair value of the Holly investment to decline to $222,000 during 2018. Nichols calculates that, of the $38,000 decrease in fair value, $8,000 of it relates to credit losses and $30,000 relates to noncredit losses.

Assume that Nichols concludes that the Holly bonds are other-than-temporarily impaired because Nichols is planning to sell the bonds in the near future. Before-tax net income for 2018 will be reduced by:

a. $30,000

b. $38,000

c. $0

d. $8,000

5. Which category of securities is presented on the balance sheet at amortized cost?

a. securities available for sale

b. equity investments of less than 20 percent ownership

c. held to maturity securities

d. trading securities

Expert Answer

 

Grand Paper Writers
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All papers are written by the best professional writers to ensure 100% originality. We always provide plagiarism reports whenever we deliver completed papers.

Free Revisions

All papers by Grand Paper Writers are completed and submitted on time. This timely delivery of papers gives you time to go through the paper before the official deadline.

Title-page

As an additional service, we will provide a title page that precedes the contents of your paper. Here, you will provide your personal details.

Bibliography

We also ensure that we provide an extra page for the references or bibliographies following referencing rules.

Originality & Security

At Grandpaperwriters.com, we guarantee students for the provision of security and original work. All your personal information is handled with confidentiality and is not shared with third parties. Additionally, we ensure that we provide original content with accompanying plagiarism reports to show originality.

24/7 Customer Support

Our customer support team is always available 24/7 to provide instant responses to any queries raised by students.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Grandpaperwriters.com has the best professional essay writers for quality services.

Pricing

Flexible Pricing

Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.

Communication

Admission Help & Client-Writer Contact

Grandpaperwriters.com provides an interactive portal where students can communicate directly to their writers.

Deadlines

Paper Submission

Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.

Reviews

Customer Feedback

Grandpaperwriters.com appreciates feedback from our clients to help us improve the delivery of essay writing services. As such, we are constantly changing our policies to ensure maximum customer and writer satisfaction.