Chapter 12, Problem 12.5DMP

Which financial ratios will you study and why before investing in a company's debentures? * Confirm upvote/helpful answer.

Describe the accounting for bonds payable, including bonds issued at face amount, bonds issued at a discount, and bonds issued at a premium? Describe how bonds are reported on the balance sheet? Describe how the times interest earned ratio is used to evaluate a company’s financial condition? Describe the advantages and disadvantages of the corporate form of business ownership? Describe the characteristics of corporate stock, the classes of stock, and the accounting entries for stock issuance? Search entries or author .

Which of the following results in a decrease in the investment account when applying the equity method? Purchase of additional common stock by the investor during the current year. Dividends paid by the investor. Share of gross profit on intra-entity inventory sales for the current year. Net income of the investee. Net income of the investor.

On which financial statement would a banker find the amount of common stock issued during the period?  statement of stockholder's equity  balance sheet  income statement

1. Define comprehensive income. What are the ways companies can present comprehensive income? 2. How are discontinued operations reported in the income statement? 3. Explain the difference(s) between investments in equity securities classified as current assets versus those classified as long-term (noncurrent) assets? 4. A summary of the company's significant accounting policies is a required disclosure. Why is this disclosure important to external financial statement users? 5. Deferred revenues represent liabilities recorded when cash is received from customers in advance of providing a good or service. What adjusting journal entry is required at the end of a period to recognize the amount of deferred revenues that were recognized during the period?

When using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.

Under the equity method of accounting for investments, which of the following statements is true? a) Dividends received are recorded as revenue. b) Unrealized gains and losses are recorded in the income statement. c) Investments are initially recorded at fair value. d) The investor has significant influence over the investee. ***This question already posted and got correct answer. Don't answer this question If you answer i will give 10 dislikes.****

Discuss how a company's primary financial statements are useful to potential investors who are trying to decide whether to buy stock in a company.

(Equity Items on the Balance Sheet) The following are selected transactions that may affect stockholders’ equity.1. Recorded accrued interest earned on a note receivable.2. Declared a cash dividend.3. Declared and distributed a stock split.4. Approved a retained earnings restriction.5. Recorded the expiration of insurance coverage that was previously recorded as prepaid insurance.6. Paid the cash dividend declared in item 2 above.7. Recorded accrued interest expense on a note payable.8. Declared a stock dividend.9. Distributed the stock dividend declared in item 8.InstructionsIn the following table, indicate the effect each of the nine transactions has on the financial statement elements listed. Use the following code: I = Increase, D = Decrease, NE = No effect. Item Assets Liabilities Stockholders’Equity Paid-inCapital RetainedEarnings NetIncome