CPA-00116The U.S. GAAP lower of cost or market rule for inventories may be applied to total inventory, to groups of similar items, or to each item. Which application generally results in the lowest inventory amount?
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3 .CPA-05914Anchor Co. owns 40% of Main Co.'s common stock outstanding and 75% of Main's noncumulative preferred stock outstanding. Anchor exercises significant influence over Main's operations. During the current period, Main declared dividends of USD 200,000 on its common stock and USD 100,000 on its noncumulative preferred stock. What amount of dividend income should Anchor report on its income statement for the current period related to its investment in Main?
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4 .CPA-00483In its financial statements, Pulham Corp. uses the equity method of accounting for its 30% ownership of Angles Corp. At December 31, Year 1, Pulham has a receivable from Angles. How should the receivable be reported in Pulham's Year 1 financial statements?
A The total receivable should be included as part of the investment in Angles, without separate disclosure. B The receivable should be eliminated. C Seventy percent of the receivable should be separately reported, with the balance eliminated. D The total receivable should be disclosed separately.
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