Question

Please answer the questions

D Question 1 2 pts Long-term investments are held for allo the isted reatons below O to eam the interenst or dividend income O for its leng-trm ga oteial Oto influence over anoher buness enity O to meet curent cash need D Question 2 2 pts On June 1. 550,000 of treasury bonds were punchaned between intorest dates. The broker commission was $500 The bonds pay intorest at 12%, which i paid semiannually on January 1 and July 1. Whut İsthe totaloost to be debited to the nvestmene Treasury Bends accounti $50000 $50.500 549500 O $53000 Question 3 2 pts Armando Compaty owns 17 000 of the 70.000 shares of common stock outstanding of Tito Company and esercises a significant inluence over its eperating and fnancial policies The investment should be accounted for by the O equity method O cottor market method O nt methed DI Question 4 2 pts In goneral comolidated financial statements should be prepared O whenever the mwket value of the stock

Answer 1

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Solution: All are individual questions: Explanation Because, the reason of long term investment is to earn the long term benefits from the investment only. Answers: 1) To meet current cash need 2) $50,500 Original Cost of bonds Commission Cost of Investment (50000+500) $50,500 3) Equity Method It is standardized to use equity method in case of significant influence. When a corporation owns more than 50% of the common stock of another company 4) It is standardized.