Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-05 Prepare journal entries using the fair value option. Topic: The Fair Value Option 13. On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively. Based on the preceding information, what amount will be reported by Yang as balance in investment in Spiel on December 31, 20X8, if it used the fair value option to account for its investment in Spiel? AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Prepare journal entries using the fair value option. Topic: The Fair Value Option 14. A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires: AACSB: Reflective Thinking AICPA FN: Reporting Blooms: Remember
Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-05 Prepare journal entries using the fair value option. Topic: The Fair Value Option 13. On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively. Based on the preceding information, what amount will be reported by Yang as balance in investment in Spiel on December 31, 20X8, if it used the fair value option to account for its investment in Spiel? AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-05 Prepare journal entries using the fair value option. Topic: The Fair Value Option 14. A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires: AACSB: Reflective Thinking AICPA FN: Reporting Blooms: Remember
Advanced-Financial-Accounting-10th-Edition-Christensen,-Cottrell,-Baker-Test-Bank.docx