The following selected amounts are available for Clark Company.

The following selected amounts are available for Clark Company.

Retained earnings (beginning)$800

Net loss150

Cash dividends declared100

Stock dividends declared100

What is its ending retained earnings balance?

 $650

 $700

 $450

On January 1, 2012, Carter Corporation issued $5,000,000, 10-year, 8% bonds at 103. Interest is payable semiannually on January 1 and July 1. The journal entry to record this transaction on January 1, 2012 is

 Cash5,000,000 

Bonds Payable5,000,000

 Premium on Bonds Payable150,000 

Cash5,000,000 

Bonds Payable5,150,000

 Cash5,150,000 

Bonds Payable5,150,000

 Cash5,150,000 

Bonds Payable5,000,000

Premium on Bonds Payable150,000

Wise Company owns 30% interest in the stock of Dark Corporation. During the year, Dark pays $20,000 in dividends to Wise, and reports $200,000 in net income. Wise Company's investment in Dark will increase Wise's net income by

 $66,000.

 $80,000.

 $60,000.

Which of the following reasons best explains why a company that experiences seasonal fluctuations in sales may purchase investments in debt or stock securities?

 The company may invest for speculative reasons to increase the value in pension funds.

 The company may have excess cash.

 The company may generate a significant portion of its earnings from investment income.

 The company may invest for the strategic reason of establishing a presence in a related industry.

Each of the following may be shown on a supporting schedule instead of on the balance sheet except the

 maturity dates.

 current maturities of long-term debt.

 conversion privileges.

 interest rates.

A company that acquires less than 20% ownership interest in another company should account for the stock investment in that company using

 consolidated financial statements.

 the significant method.

 the cost method.

 the equity method.

The balance in the Unrealized Loss—Equity account will

 appear on the income statement under Other Expenses and Losses.

 appear on the balance sheet as a contra asset.

 not be shown on the financial statements until the securities are sold.

 appear as a deduction in the stockholders' equity section.

Changes from cost are reported as part of net income for

 trading securities.

 held-to-maturity securities.

 debt securities.

 available-for-sale securities.

If the equity method is being used, cash dividends received

 are credited to Dividend Revenue.

 require no entry because investee net income has already been recorded at the proper proportion on the investor's books.

 are credited to the Revenue from Stock Investments account.

 are credited to the Stock Investments account.

If there is a loss on bonds redeemed early, it is

 reported as an "Other Expense" on the income statement.

 debited directly to Retained Earnings.

 debited to Interest Expense, as a cost of financing.

 reported as an "Extraordinary Item" on the income statement.

Prior period adjustments are reported

 in the footnotes of the current year's financial statements.

 on the current year's retained earnings statement.

 on the current year's balance sheet.

 on the current year's income statement.

The return on common stockholders' equity is computed by dividing

 net income minus preferred dividends by ending common stockholders' equity.

 net income minus preferred dividends by average common stockholders' equity.

 net income by ending common stockholders' equity.

 net income by average common stockholders' equity.

In the stockholders' equity section of the balance sheet,

 Dividends in arrears will appear as a restriction of Retained Earnings.

 Common Stock Dividends Distributable will be classified as part of additional paid-in capital.

 Common Stock Dividends Distributable will appear in its own subsection of the stock- holders' equity.

 Additional Paid-in Capital appears under the subsection Paid-in Capital.