I got a handful of questions wrong for all the aicpa released questions (8 or so). I will post them so everyone can see their tricks and can learn from them.
In year 1, a company reported in other comprehensive income an unrealized holding loss on an investment in available-for-sale securities. During year 2, these securities were sold at a loss equal to the unrealized loss previously recognized. The reclassification adjustment should include which of the following?
a. The unrealized loss should be credited to the investment account.
b. The unrealized loss should be credited to the other comprehensive income account.
c. The unrealized loss should be debited to the other comprehensive income account.
d. The unrealized loss should be credited to beginning retained earnings.
Lem Co., which accounts for treasury stock under the par value method, acquired 100 shares of its $6 par value common stock for $10 per share. The shares had originally been issued by Lem for $7 per share. By what amount would Lem's additional paid-in capital from common stock decrease as a result of the acquisition?
a. $0
b. $100
c. $300
d. $400
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