============================================== ACC 577 Week 4 Quiz( 100 % Correct Answers) FOR MORE CLASSES VISIT www. acc577outlet. com
at the time of sale. Collections received for service contracts should be recorded as an increase in a
Question 19
On January 1, 2005, Mega Corp. acquired 10 % of the outstanding voting stock of Penny, Inc. On January 2, 2006, Mega gained the ability to exercise significant influence over financial and operating control of Penny by acquiring an additional 20 % of Penny ' s outstanding stock. The two purchases were made at prices proportionate to the value assigned to Penny ' s net assets, which equaled their carrying amounts. For the years ended December 31, 2005 and 2006, Penny reported the following: In 2006, what amounts should Mega report as current year investment income and as an adjustment, before income taxes, to 2005 investment income?
Question 20
In November and December 2005, Dorr Co., a newly organized magazine publisher, received $ 72,000 for 1,000 three-year subscriptions at $ 24 per year, starting with the January 2006 issue. Dorr elected to include the entire $ 72,000 in its 2005 income tax return. What amount should Dorr report in its 2005 income statement for subscriptions revenue?
============================================== ACC 577 Week 4 Quiz( 100 % Correct Answers) FOR MORE CLASSES VISIT www. acc577outlet. com