30) An investor purchased 500 shares of common stock, $25 par, for $21,750. Subs

Question

30) An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $40.50 per share. What is the amount of gain or loss on the sale?
a. $4,050 gain
b. $300 gain
c. $1,550 gain
d. $300 loss

32) Blanton Corporation purchased 35% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives from Worton Corporation?
a. debit Investment in Worton Corporation; credit Cash
b. debit Investment in Worton Corporation; credit Income of Worton Corporation
c. debit Cash; credit Investment in Worton Corporation
d. debit Cash; credit Dividend Revenue

33) Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.
a. true
b. false

37) Wendell Company owns 28% of the common stock of Porter Company and accounts for the investment using the equity method. Assuming that Wendell Company purchased the stock several years ago, the balance in the investment account would be equal to the cost of the
a. investment plus the total amount of dividends Wendell has received from Porter since the investment was purchased
b. investment only
c. investment plus Wendell's share of Porter's net income earned since the investment was purchased
d. investment plus Wendell's share of Porter's net income earned since the investment was purchased minus the total amount of dividends Wendell has received from Porter since the investment was purchased

38) Blanton Corporation purchased 12% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives?
a. debit Cash; credit Investment in Worton Corporation
b. debit Investment in Worton Corporation; credit Income of Worton Corporation
c. debit Cash; credit Dividend Revenue
d. debit Investment in Worton Corporation; credit Cash

Explanation / Answer

30) d. $300 loss 32) c.. debit Cash; credit Investment in Worton Corporation 33) a. true 37) d. investment plus Wendell's share of Porter's net income earned since the investment was purchased minus the total amount of dividends Wendell has received from Porter since the investment was purchased 38) c. debit Cash; credit Dividend Revenue

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.