Question Details

appropriate method of accounting for this type of investment



1.	Debt investments are investments in government and _____________ bonds.


	2.	Cost of debt investments includes the price paid plus ______________



	3.	When an investor owns between 20% and 50% of the common stock of a corporation, it is generally presumed that the investor has _______________ influence over the investee and therefore, the appropriate method of accounting for this type of investment is the _______________ method.


	4.	Under the cost method, dividends received from an investee company are credited to the _______________ account, whereas under the equity method, dividends received from an investee company are credited to the _______________ account.



	5.	At the beginning of the year, Grant Corporation acquired 15% of Ernst Company common stock for $300,000. Ernst Company reported net income for the year of $75,000 and paid $25,000 cash dividends during the year. The balance of the Stock Investments account on the books of Grant Corporation at the end of the year should be $___________.




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