Reference no: EM132602229

Question 1: Which of the following statements is NOT true?

A. Under hedge, gains or losses could be reported in net income on the financial ?reporting day.

B. Under hedge, gains or losses could be reported in OCI on the financial reporting day.

C. Where to report gains or losses from hedge does not depend on the type of hedge ?involved.

D. Where to report gains or losses from hedge depends on the type of hedge involved.

Question 2: Which of the following statements is NOT true?

A. Parent's portion in consolidated net income could be decreased by downstream ?inventory sales.

B. Parent's portion in consolidated net income could be increased by downstream ?inventory sales.

C. NCI in profit will not be affected by downstream inventory sales.

D. NCI in profit will be affected by downstream inventory sales.

Question 3: A company holds 70% of B company's voting shares and uses cost method for this equity investment. A also holds 30% of C company's voting shares and uses equity method for this equity investment. B company holds 25% of C company's voting shares and uses equity method for this equity investment. The followings are the net income reported on the separate-entity income statement by each company, respectively: ?ABC Net income $150,000 $11,350 $7,800 ?Which of the followings is Parent's portion in the consolidated net income?

A. $159,310

B. $161,350

C. $157,945

D. $169,150

Question 4: On Jan.1, Y1, MIT Ltd. acquired 1,000 voting shares of Berg Ltd at a price of $ 20 per share. On the event day, Berg had 10,000 shares outstanding. On Jan 1, Y2, MIT acquired additional 2,000 voting shares of Berg at a price of $ 23 per share. Berg reported net income of $50,000 for Y1 and $60,000 for Y2. What is the carrying value of MIT's investments in Berg at the end of Y2 under equity method?

A. $87,000

B. $84,000

C. $92,000

D. $89,000