Use the Following Information to Answer the Question(s) Below

question 33

Multiple Choice

Use the following information to answer the question(s) below.

Plenty Corporation issued six thousand, $1,000 par, 6% bonds on January 1, 2012, at par. Interest is paid on January 1 and July 1 of each year; the bonds mature on January 1, 2017. On January 2, 2014, Scrawn Corporation, a 75%-owned subsidiary of Plenty, purchased 3,000 of the bonds on the open market at 102.50. Plenty's separate net income for 2014 included the annual interest expense for all 3,000 bonds. Scrawn's separate net income for 2014 was $400,000, which included the bond interest received on July 1 as well as the accrual of bond interest revenue earned on December 31. Both companies use straight-line amortization of bond discounts/premiums.

-Using the original information,the elimination entries on the consolidation working papers prepared on December 31,2014 included at least

• A)debit to Bond Interest Expense for $360,000.
• B)credit to Bond Interest Expense for $180,000 and a debit to Bond Interest Payable for $90,000.
• C)credit to Bond Interest Receivable for $180,000.
• D)debit to Bond Interest Revenue for $360,000.

Recognize the significance of the net profit margin as a financial metric.

Understand the treatment of unrealized gains and losses on trading securities.

Differentiate between current and non-current assets in the context of long-term investments.

Identify the classifications of long-term investments in equity securities based on investor influence.

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Definitions:

Etruscan Tombs

Burial sites from the ancient Etruscan civilization, notable for their elaborate designs, wall paintings, and the wealth of artifacts that provide insight into Etruscan life and culture.

Macedonian Tombs

Ancient burial structures from the Macedonian kingdom, showcasing sophisticated architecture and rich decorations reflective of the period's funerary practices.

Cist Graves

Ancient burial sites consisting of small stone-built coffins (cists) laid flat and covered with earth or mounds of stones.

Liquid Dedications

Offerings in the form of liquids such as oils, wine, or water, typically made to deities or ancestors in various religious or spiritual practices.