Security $90,000 150,000 32,000 $93,000 141,000 29,000 Settle should report the
ID: 2404864 • Letter: S
Question
Security $90,000 150,000 32,000 $93,000 141,000 29,000 Settle should report the following amount related to the securities in its 2012 income statement a. $3,000 gain b. $9,000 realized loss C, $9,000 unrealized loss. d. $12,000 unrealized loss. 13. The balance in the Unrealized Loss-Equity account will a. appear on the balance sheet as a contra asset b. appear on the income statement under Other Expenses and Losses. c. appear as a deduction in the stockholders' equity section d. not be shown on the financial statements until the securities are sold 14. Consolidated financial statements are prepared when a company owns of the common stock of another company less than 20% between 20% and 50% less than 50% more than 50% a. b, C. d, 15. Mission Inc, earns $450,000 and pays cash dividends of $150,000 during 2012. Cox Corporation o 70,000 of the 210,000 outstanding shares of Mission. How much revenue from investment should Cornwell report in 2012? a. $50,000 b. $100,000 c. $150,000 d. $200,000Explanation / Answer
13
Unrealized loss equity is a contra asset on the balance sheet
14
More than 50% ownership required to consolidate
15
Owning 1/3 ownership requires equity method income recognition
Income = 450000 * 1/3=150000