Garcia Corporation purchased 22,000 shares of Lee Corporation common stock for $80 per share on January 1, 2014. Lee reported net income of $140,000 for 2014 and paid dividends of $90,000 during 2014. As of December 31, 2014, the market value of Lee Corporation common stock was $78 per share. Assuming the shares owned by Orlov represent 10 percent of the total outstanding stock of Lee, the
year-end adjustment entry in Garcia Corporation's books is:
A) Cash 44,000 Dividend Income 44,000
B) Cash 44,000 Long-Term Investments 44,000
C) Unrealized Loss on Long-Term Investments 44,000 Allowance to Adjust Long-Term Investments to Market 44,000
D) Loss on Long-Term Investments 44,000 Allowance to Adjust Long-Term Investments to Market 44,000
C
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Nick, the R&D department manager of Precise, a manufacturer of high-quality watches for over 125 years, was told in a management meeting that the company's biggest competitor, Accurate Watches, is introducing a low-cost, yet attractive line of watches that will be sold in Walmart stores. As a result, the top management of Precise is pressuring Nick to lower the production costs on existing products and also to develop a line of watches that can be manufactured inexpensively to be marketed to a wider variety of customers at a much lower price. This is an example of a quality-leadership strategy.
a. True b. False
For revenues, the category of account and its normal balance is ________.
A) equity and a credit balance B) assets and a debit balance C) assets and a credit balance D) equity and a debit balance