Questions from Financial Accounting

Q: Hamilton Company purchased a machine for $11,800 on January

Hamilton Company purchased a machine for $11,800 on January 1, 2016. The machine has been depreciated using the straight-line method over a four-year life with a $1,600 residual value. Hamilton sold t...

Q: A company purchased mineral assets costing $889,000 with estimated

A company purchased mineral assets costing $889,000 with estimated residual value of $70,000 and holding approximately 260,000 tons of ore. During the first year, 53,000 tons are extracted and sold. W...

Q: Suppose AmerEx pays $72 million to buy Lone Star Overnight.

Suppose AmerEx pays $72 million to buy Lone Star Overnight. The fair value of Lone Star’s assets is $86 million, and the fair value of its liabilities is $21 million. How much goodwill did AmerEx purc...

Q: Harper, Inc., was reviewing its assets for impairment at the

Harper, Inc., was reviewing its assets for impairment at the end of the current year. Information about one of its assets is as follows: Harper should report an impairment loss for the current year...

Q: Data World, Inc., reported sales revenue of $480,

Data World, Inc., reported sales revenue of $480,000, net income of $36,000, and average total assets of $300,000. Data World’s return on assets is a. 7.5%. b. 1.6%. c. 62.5%. d. 12.0%.

Q: Assume that Clear Networks owns the following long-term available-

Assume that Clear Networks owns the following long-term available-for-sale investments: Clear’s balance sheet at year-end should report a. investments of $58,250. b. dividend rev...

Q: Assume that Clear Networks owns the following long-term available-

Assume that Clear Networks owns the following long-term available-for-sale investments: Clear’s income statement for the year should report a. gain on sale of investment of $14,60...

Q: Assume that Clear Networks owns the following long-term available-

Assume that Clear Networks owns the following long-term available-for-sale investments: Suppose that, before year-end, Clear sells the Harper stock for $74 per share. Journalize the sale.

Q: Dividends received on an equity-method investment a. increase

Dividends received on an equity-method investment a. increase dividend revenue. b. increase the investment account. c. decrease the investment account. d. increase owners’ equity.

Q: The starting point in accounting for all investments is a.

The starting point in accounting for all investments is a. market value on the balance-sheet date. b. cost minus dividends. c. equity value. d. cost.