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MC Qu. 95 Select the correct statement from...

Select the correct statement from the following:

Multiple Choice

-Profit margin reflects a company's ability to produce net sales from total assets.

-Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.

-High returns on total assets are desirable.

-Total asset turnover reflects the percent of net income in each dollar of net sales.

-Return on total assets can be separated into gross margin ratio and price-earnings ratio.

MC Qu. 122 McVeigh Corp...

McVeigh Corp. owns 40% of Gondor Company's common stock. McVeigh received $59,200 in cash dividends from Gondor. The entry to record this transaction should include a:

Multiple Choice

-Credit to Cash for $59,200.

-Credit to Long-Term Investments for $59,200.

-Debit to Dividend Revenue for $59,200.

-Credit to Long-Term Investments for $148,000.

-Debit to Dividends for $148,000.

MC Qu. 127 On January 4, Year 1, Barber Company...

On January 4, Year 1, Barber Company purchased 12,000 shares of Convell Company for $144,000 plus a broker's fee of $3,800. Convell Company has a total of 60,000 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $114,000 and $109,000 for Year 1 and Year 2, respectively. The January 12, Year 3, entry to record Barber's sale of 7,200 shares of Convell Company stock, which represents 60% of Barber's total investment, for $97,200 cash should be:

Multiple Choice

-Debit Cash $97,200; debit Loss on Sale of Investment $50,600; credit Long-Term Investments $147,800.

-Debit Cash $97,200; debit Loss on Sale of Investment $20,400; credit Long-Term Investments $117,600.

-Debit Cash $97,200; debit Loss on Sale of Investment $6,000; credit Long-Term Investments $103,200.

-Debit Cash $97,200; credit Gain on Sale of Investment $8,520; credit Long-Term Investments $88,680.

-Debit Cash $97,200; credit Gain on Sale of Investment $20,400; credit Long-Term Investments $76,800.

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