Question 34 Pharoah Company acquires 80 Dodds 13 5 year 1000

Question 34

Pharoah Company acquires 80 Dodd’s 13%, 5 year, $1000 bonds on January 1, 2017 for $80000. If Pharoah sells all of its Dodd’s Bonds for $78900 what gain or loss is recognized?

Loss of $1100

Loss of $11500

Gain of $1100

Gain of $11500

Question 35

Pina Colada Corp. sells 100 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $50 a share. Ashl and Keller sold the shares for $53 a share. The entry to record the sale is

Question 36

Blue Company owns 25% interest in the stock of Pina Colada Corporation. During the year, Pina Colada pays $66000 in dividends to Blue, and reports $401000 in net income. Blue Company’s investment in Pina Colada will increase Blue net income by

$77750.

$100250.

$66000.

$11750.

Question 40

Cullumber Company purchases land for $150000 cash. Cullumber assumes $4800 in property taxes due on the land. The title and attorney fees totaled $3100. Cullumber has the land graded for $3400. They paid $22000 for paving of a parking lot. What amount does Cullumber record as the cost for the land?

$150000.

$183300.

$156500.

$161300.

Question 43

Equipment with a cost of $950000 has an estimated salvage value of $30000 and an estimated life of 4 years or 20000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 5000 hours?

$245000.

$242500.

$230000.

$237500.

Question 44

A company purchased factory equipment on April 1, 2017, for $159500. It is estimated that the equipment will have a $15500 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017, is

$11963.

$10800.

$15950.

$14400.

Question 45

Sheffield Corp. bought equipment on January 1, 2017. The equipment cost $410000 and had an expected salvage value of $50000. The life of the equipment was estimated to be 6 years. The company uses the straight-line method of depreciation. The book value of the equipment at the beginning of the third year would be

$410000.

$290000.

$360000.

$120000.

Question 46

In 2014, Riverbed Corp. has plant equipment that originally cost $180000 and has accumulated depreciation of $41000. A new processing technique has rendered the equipment obsolete, so it is retired. Which of the following entries should Riverbed use to record the retirement of the equipment?

Loss on Disposal of Plant Assets

139000

Accumulated Depreciation - Equipment

139000

Accumulated Depreciation - Equipment

41000

Loss on Disposal of Plant Assets

139000

Equipment

180000

Plant Equipment

180000

Accumulated Depreciation - Equipment

41000

Loss on Disposal of Plant Assets

139000

Loss on Disposal of Plant Assets

139000

Equipment

139000

Loss of $1100

Solution

34)

Gain or (loss) is recognized:

= Sale price – Purchase price

= $78,900-$80,000

= ($1,100)

Hence, correct option is Loss of $1100.