KINE 310 Study Guide - Final Guide: Fat Day
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1) On February 15, Jewel Company buys 7,300 shares of MarceloCorp. common stock at $28.56 per share plus a brokerage fee of$400. The stock is classified as available-for-sale securities.This is the companyâs first and only investment inavailable-for-sale securities. On March 15, Marcelo Corp. declaresa dividend of $1.18 per share payable to stockholders of record onApril 15. Jewel Company received the dividend on April 15 andultimately sells half of the Marcelo Corp. stock on November 17 ofthe current year for $29.33 per share less a brokerage fee of $250.The journal entry to record the dividend on April 15 is:
A) Debit Cash $8,614; credit Dividend Revenue $8,614.
B) Debit Cash $8,614; credit Interest Revenue $8,614.
C) Debit Cash $8,614; credit Gain on Sale of Investments$8,614.
D) Debit Cash $7,865; credit Dividend Revenue $7,865.
E) Debit Cash $7,865; credit Interest Revenue $7,865.
2) On February 15, Jewel Company buys 7,800 shares of MarceloCorp. common at $28.61 per share plus a brokerage fee of $435. Thestock is classified as available-for-sale securities. This is thecompanyâs first and only investment in available-for-salesecurities. On March 15, Marcelo Corp. declares a dividend of $1.23per share payable to stockholders of record on April 15. JewelCompany received the dividend on April 15 and ultimately sells halfof the Marcelo Corp. stock on November 17 of the current year for$29.38 per share less a brokerage fee of $290. The fair value ofthe remaining 3,900 shares is $29.58 per share. The amount thatJewel Company should report in the asset section of its year-endDecember 31 balance sheet for its investment in Marcelo Corp.is:
A) $223,593.
B) $3,566.
C) $115,362.
D) $2,496.
E) $6,681.
3) Six months ago, a company purchased an investment in stockfor $69,000. The investment is classified as available-for-salesecurities. This is the companyâs first and only investment inavailable-for-sale securities. The current fair value of the stockis $72,900. The company should record a:
A) Credit to Investment Revenue for $3,900.
B) Debit to Investment Revenue for $3,900.
C) Debit to Unrealized Loss-Equity for $3,900.
D) No entry is required.
E) Credit to Unrealized Gain-Equity for $3,900.
4) Claymore Corp. has the following information about itsstandards and production activity for September. The volumevariance is:
Actual total factoryoverhead incurred | $ | 23,880 | ||
Standard factory overhead: | ||||
Variable overhead | $ | 5.80 | per unit produced | |
Fixed overhead | ||||
($6,720 / 4,200 estimated unitsto be produced) | $ | 1.60 | per unit | |
Actual units produced | 2,700 | units | ||
A) $2,400U.
B) $3,900U.
C) $1,500F.
D) $1,500U.
E) $2,400F.
5) Use the following information to calculate cash paid forincome taxes:
Income TaxExpense | $ | 64,000 | |
Income Tax Payable, January1 | 23,000 | ||
Income Tax Payable, December31 | 14,000 |
A) $73,000.
B) $87,000.
C) $78,000.
D) $55,000.
E) $64,000.
6) On February 15, Jewel Company buys 6,100 shares of MarceloCorp. common at $28.72 per share plus a brokerage fee of $490. Thestock is classified as available-for-sale securities. This is thecompanyâs first and only investment in available-for-salesecurities. On March 15, Marcelo Corp. declares a dividend of $1.24per share payable to stockholders of record on April 15. JewelCompany received the dividend on April 15 and ultimately sells halfof the Marcelo Corp. stock on November 17 of the current year for$29.49 per share less a brokerage fee of $345. The fair value ofthe remaining shares is $29.69 per share. The amount that JewelCompany should report in the equity section of its year-endDecember 31 balance sheet for its investment in Marcelo Corp. is(Round your intermediate dollar values to the nearestdollar amount):
A) Unrealized Gain âEquity; $2,714.
B) Realized Gain âEquity; $7,564.
C) Unrealized Gain â Equity; $5,427.
D) Unrealized Loss âEquity; $1,758.
E) Unrealized Gain âEquity; $9,322.
7) On February 15, Jewel Company buys 6,900 shares of MarceloCorp. common stock at $28.64 per share plus a brokerage fee of$450. The stock is classified as available-for-sale securities.This is the companyâs first and only investment inavailable-for-sale securities. On March 15, Marcelo Corp. declaresa dividend of $1.16 per share payable to stockholders of record onApril 15. Jewel Company received the dividend on April 15 andultimately sells half of the Marcelo Corp. stock on November 17 ofthe current year for $29.41 per share less a brokerage fee of $305.The fair value of the remaining shares is $29.61 per share. Theimpact on Jewelâs net income as a result of its investment inMarcelo Corp. was a(n) (Round your intermediate dollarvalues to the nearest dollar amount):
A) Decrease to income of $2,127.
B) Increase to income of $10,131.
C) Increase to income of $3,122.
D) Decrease to income of $8,004.
E) Increase to income of $5,565.