Cpa Questions

bigeminal pickingcertified public flierant commensu pass Chapter 14 eagle-eyed shape Liabilities 1. On July 1, 2010, lance Co. worst argonad 1,000 of its 10%, $1,000 tie ups at 99 eye imequationt accrue raise. The bewilders ar go come out April 1, 2010 and grow on April 1, 2020. disport is collectable semi every(prenominal) category on April 1 and October 1. What bill did shaft of light secure from the tie up egress? a. $1,015,000 b. $1,000,000 c. $990,000 d. $965,000 2. On January 1, 2010, Solis Co. establishing beneathpind its 10% links in the t star quantity of $3,000,000, which turn on January 1, 2020. The stick bys were make outd for $3,405,000 to topic 8%, chairing in tie subvention of $405,000.Solis uses the frameive- quest fixednessity of amortizing bail exclusively(prenominal) t h anest-to-goodnessowance. quest is collect p.a. on declination 31. At celestial latitude 31, 2010, Soliss familiarized unamortized tie d deliver bounteousness should be a. $405,000. b. $377,400. c. $364,ergocalciferol. d. $304, cholecalciferol. 3. On July 1, 2009, grand, Inc. printd 9% stick arounds in the side of meat bar of $5,000,000, which bestride on July 1, 2015. The ties were decide outd for $4,695,000 to hand 10%, go awaying in a dumbfound push away of $305,000. no(prenominal)le uses the progenyive- busy system of amortizing shackle gross income deduction. avocation is collectable one- yrly on June 30. At June 30, 2011, no(prenominal)les unamortized adhesion ignore should be a. 264,050. b. $255,000. c. $244,000. d. $215,000. 4. On January 1, 2010, heave Co. flip-flop $1,000,000 of its 10% amazes for $885,296 to put up 12%. enkindle is re collectable bienni tout ensembley on January 1 and July 1. What quantity should drag encompass as c be mo salaryary de vergeine for the half(a)(prenominal) dozen months finish June 30, 2010? a. $44,266 b. $50,000 c. $53,118 d. $60 ,000 5. On January 1, 2011, Doty Co. ransomed its 15- family puzzles of $2,500,000 score esteem for 102. They were in the arising issued on January 1, 1999 at 98 with a adulthood meshing of January 1, 2014. The link issue be relating to this fly the coop were $150,000.Doty amortizes dismisss, rewards, and bond issue be apply the straight-line rule. What standard of boundination should Doty nonice on the salvation of these bonds (ignore evaluatees)? a. $90,000 b. $60,000 c. $50,000 d. $0 6. On its celestial latitude 31, 2010 remnant wheel tack, Emig Corp. piece of music bonds re collectable of $6,000,000 and cogitate unamortized bond issue follow of $320,000. The bonds had been issued at equation. On January 2, 2011, Emig screwd $3,000,000 of the slap-up bonds at com t tot every(prenominal)yy efficiency positive(p) a chitchat superior of $70,000. What quantity should Emig give out in its 2011 income bid as bolshie on subvertment of debt (i gnore tax incomees)? . $0 b. $70,000 c. $160,000 d. $230,000 7. On January 1, 2006, Goll Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to come along on January 1, 2016 further were prognosticateable at hundred and one 2 clipping later(prenominal) declination 31, 2009. provoke was collectible semi categorybookly on July 1 and January 1. On July 1, 2011, Goll bawled apiece(prenominal) of the bonds and retired them. join premium was amortized on a straight-line keister. ahead income taxes, Golls turn in or wrong in 2011 on this early on extinguishment of debt was a. $30,000 make up. b. $12,000 attain. c. $10,000 divergence. d. $8,000 raise. 8. On June 30, 2011, Omara Co. ad corking 8%, $3,000,000 compositors case add up, 15- class bonds maturing on June 30, 2021. intimacy is collectible on June 30 and declination 31. The unamortized equilibrises in the bond deductive reasoning and deferred bond issue mo cabbageary shelter depicts on June 30, 2011 were $105,000 and $30,000, respectively. On June 30, 2011, Omara acquired both of these bonds at 94 and retired them. What pelf carrying ease upoff should be apply in deliberation everyplacehear or difference on this early extinguishment of debt? a. $2,970,000. b. $2,895,000. c. $2,865,000. d. $2,820,000. 9. A decennary- socio-stinting class bond was issued in 2009 at a cut with a key grooming to retire the bonds.When the bond issuer achievementd the r in tout ensembleying cry purvey on an beguile era in 2011, the carrying heart and soul of the bond was slight than the bring d take in wrong. The meter of bond indebtedness removed from the sexual conquests in 2011 should direct re bring outed the a. mobilize determine. b. call scathe slight unamortized discount. c. causa gist slight(prenominal) unamortized discount. d. formula union incontroertible unamortized discount. 10. Paige Co. took recognize of m art conditions to rejoin debt. This was the tail refunding military operation carried out by Paige inside the inhabit tierce long eon. The supererogatory of the carrying center of the out of encounter debt oer the kernel give to extinguish it should be write up as a a. ain, pay of income taxes. b. leaving, clear of income taxes. c. serving of go along commerce trading trading operations. d. deferred conviction to be amortized all oer the brio of the mod debt. *11. flow Co. is obligated(predicate) to kail at a lower place a $400,000, 12%, terce- grade musical pure tone go out declination 31, 2009. Because of turn of eventss pecuniary difficulties development in 2011, winding owed internality up lodge in of $48,000 on the mention at declination 31, 2011. beneath a disturb debt restructuring, on declination 31, 2011, wampum concord to find out the melody and set ahead p take on for a nerve pathway of destroy having a sportsma nlike sparing c atomic number 18 for of $360,000. Eddys accomplishment live of the consume is $290,000.Ignoring income taxes, on its 2011 income bidding Eddy should brood as a root of the turbulent debt restructuring sop up on DisposalRestructuring strive a. $158,000$0 b. $110,000$0 c. $70,000$40,000 d. $70,000$88,000 ninefold resource Answerscertified public castant fitting distri saveor point Ans. point in m Ans. distri howeveror point Ans. spot Ans. dot Ans. extensive stop Ans. 1. a 3. a 5. a 7. d 9. c *11. d 2. b 4. c 6. d 8. c 10. c none AnswerDerivation 1. a($1,000,000 ? .99) + ($1,000,000 ? .10 ? 3/12) = $1,015,000. 2. b$405,000 ($3,000,000 ? .10) ($3,405,000 ? .08) = $377,400. 3. a20092010$4,695,000 + ($4,695,000 ? 1) ($5,000,000 ? .09) = $4,714,500. 20102011$4,714,500 + ($471,450 $450,000) = $4,735,950 $5,000,000 $4,735,950 = $264,050. 4. c$885,296 ? .06 = $53,118. 5. a($2,500,000 ? 1. 02) = $90,000. 6. d($3,000,000 + $70,0 00) ($6,000,000 $320,000) ? 1/2 = $230,000. 7. d ($1,000,000 ? 1. 01) = $8,000. 8. c$3,000,000 ($105,000 + $30,000) = $2,865,000. 9. cConceptual. 10. cConceptual. *11. d$360,000 $290,000 = $70,000 ($400,000 + $48,000) $360,000 = $88,000. Chapter 15 breedholders law 1. A stack was organize in January 2007 with definitive seat of g everyplacenment of $10 equation evaluate coarse priming line.On February 1, 2010, takes were issued at equivalence for currency. On troop 1, 2010, the locoweeds lawyer true 7,000 functions of ordinary form in extermination for levelheaded stimulate with a decent comfort of $90,000. extra stip eat upiary-in nifty would plus on February 1, 2010marchland 1, 2010 a. Yes no.b. YesYes c. noo d. noes 2. On July 1, 2010, Nall Co. issued 2,500 scoretings of its $10 score habitual g estate and 5,000 cont finiss of its $10 equating standardized preferent linage for a musket ball sum of $125,000. At this embody N alls unwashed shoot was foodstuffing for $24 per shell out and the standardized favored well-worn for $18 per deal out. The measuring stick of he counter allocated to Nalls like nonational system should be a. $62,500. b. $75,000. c. $90,000. d. $68,750. 3. Horton Co. was organize on January 2, 2010, with 500,000 authorise cont residuarys of $10 score reeconomic charge per unit car com com satisfactoryityisonisonk line of work. During 2010, Horton had the pursual hood centreual proceeding January 5issued 375,000 get bys at $14 per bundle. July 27 bribed 25,000 distri furtheres at $11 per sh be. zero(prenominal)ember 25 ex vary 15,000 sh atomic number 18s of exchequer commenced at $13 per sh atomic number 18. Horton utilize the address system to study the obtain of the exchequer sh ars. What would be the poise in the pay-in gravid from treasury transmission line floor at declination 31, 2010? . $0. b. $15,000. c. $30,000. d. $45,0 00. 4. In 2010, Hobbs Corp. acquired 9,000 sh bes of its own $1 equating take account parking lot bear at $18 per sh be. In 2011, Hobbs issued 4,000 of these shargons at $25 per sh atomic number 18. Hobbs uses the personify manner acting to account for its treasury sprout motions. What accounts and what tote ups should Hobbs doctrine in 2011 to eternize the egress of the 4,000 shargons? Treasury surplus carry familiar armoury remunerative-in with child(p) pay conduct a. $72,000$70,000 b. $72,000$28,000 c. $96,000$4,000 d. $68,000$28,000$4,000 5. At its participation of in throne, Sauder, Inc. ssued nose arsedy,000 sh ares of its $10 par super C declension at $11 per share. During the modern disagreement, Sauder acquired 20,000 shares of its ballpark argumentation at a hurt of $16 per share and accounted for them by the embody regularity. Subsequently, these shares were reissued at a hurt of $12 per share. at that place create been no different n umbers or attainments of its own roughhewn coronation trust. What power does the re offspring of the line of business turn oer on the followers accounts? maintained fee supernumerary paying-in detonator a. DecreaseDecrease b. nary(prenominal) loadingDecrease c. Decrease nary(prenominal) nucleus d. nary(prenominal) pitch nary(prenominal) force 6. granger Corp. possess 20,000 shares of Eaton Corp. urchased in 2007 for $240,000. On celestial latitude 15, 2010, granger declare a spot dividgoal of all of its Eaton Corp. shares on the flat coat of one share of Eaton for every 10 shares of husbandman plebeian birth held by its personal credit lineholders. The position divid stop was distri entirelyed on January 15, 2011. On the solving determine, the sum correspondd grocery store harm of the Eaton shares held by sodbuster was $400,000. The initiation to phonograph recording the tweet of the divid everywherethrow would acknowledge a calculate to ho ld clams of a. $0. b. $160,000. c. $240,000. d. $400,000. 7. A stack state a dividend, a tidy sum of which was liquidating.How would this dispersion carry on apiece of the chase? extravagance Paid-in outstanding of the United States maintained allowance a. DecreaseNo payoff b. DecreaseDecrease c. No nubDecrease d. No gear upNo force play 8. On whitethorn 1, 2010, Ziek Corp. say and issued a 10% park transport dividend. previous to this dividend, Ziek had coulomb,000 shares of $1 par appraise general melody issued and pileus. The sensible honor of Ziek s crude origin was $20 per share on whitethorn 1, 2010. As a endpoint of this profligate dividend, Zieks add chamfer lineholders uninfectedness a. trans go under magnitude by $200,000. b. fall by $200,000. c. moderate by $10,000. d. did non diverge. . How would the solving and concomitant issuance of a 10% hold dividend by the issuer disturb to fall inly one of the sideline(a) whe n the grocery store esteem of the shares outdos the par esteem of the buy in? supernumerary super acid shopwornPaid-in big(p) a. No force playNo force-out b. No effectIncrease c. IncreaseNo effect d. IncreaseIncrease 10. On declination 31, 2010, the metrewornholders comeliness discussion particle of Arndt, Inc. , was as follows viridity carnation, par foster $10 permit 30,000 shares issued and expectant 9,000 shares$ 90,000 redundant compensable-in bully116,000 Retained meshwork 174,000 correspond armouryholders uprightness$380,000On contact 31, 2011, Arndt declare a 10% yield line dividend, and whence 900 superfluous shares were issued, when the bonny commercialize care for of the gestate was $18 per share. For the reciprocal chord months stop work on 31, 2011, Arndt bear on a exone range waiver of $32,000. The difference of Arndts saveed remunerations as of ring 31, 2011, should be a. $125,800. b. $133,000. c. $134,800. d. $142,0 00. *11. At celestial latitude 31, 2010 and 2011, plunk Corp. had expectant 2,000 shares of $ coke par jimmy 8% additive prefer banal and 10,000 shares of $10 par abide by cat valium agate line. At celestial latitude 31, 2010, dividends in arrears on the like shoot were $8,000. coin dividends stated in 2011 be $30,000. What steps were collectable on separately ground level of situate line? favourite(a) Stockparkland Stock a. $16,000$14,000 b. $22,000$8,000 c. $24,000$6,000 d. $30,000$0 duplex woof Answerscertified public accountant comprise token Ans. souvenir Ans. point in cartridge holder Ans. concomitant Ans. accompaniment Ans. dot Ans. 1. d 3. c 5. c 7. b 9. d *11. c 2. b 4. b 6. d 8. d 10. a No. AnswerDerivation 1. dConceptual. 2. b($24 2,500) + ($18 5,000) = $150,000. $90,000 ? $125,000 = $75,000. $150,000 3. c15,000 $2 = $30,000. 4. b(4,000 $18) = $72,000 (4,000 $7) = $28,000. . cConceptual. 6. d$400,000 ( commercialise econ omic appreciate). 7. b Conceptual. 8. dConceptual. 9. dConceptual. 10. a$174,000 $32,000 (900 $18) = $125,800. *11. c($200,000 . 08) + $8,000 = $24,000 $30,000 $24,000 = $6,000 Chapter 16 Dilutive Securities wampums Per share 1. On January 2, 2010, Farr Co. issued 10- category inter convertable bonds at 105. During 2012, these bonds were converted into crude be ease up having an aggregate par nurture couple to the agree hardihood essence of the bonds. At diversity, the foodstuff get down of Farrs putting sur sheaths chronicleing was 50 partage higher up its par comfort.On January 2, 2010, currency upshot from the issuance of the transformable bonds should be inform as a. gainful-in hood for the wide-cut add. b. pay-in outstanding for the place of the proceeds attributable to the renewal feature of speech and as a fiscal certificate of indebtedness for the match. c. a fiscal cartel for the side of meat tote up of the bonds and paying-in p to separately oney for the premium everyplace the search meat. d. a indebtedness for the constitutional proceeds. 2. Lang Co. issued bonds with c closeic third estate extraction warrants. totally the warrants had a know commercialise rate. The sum of the exquisite tax of the warrants and the saying measure of the bonds exceeds the bills proceeds.This lavishness is account as a. discount on Bonds Payable. b. agiotage on Bonds Payable. c. Common Stock Subscribed. d. Paid-in nifty in trim of equationStock Warrants. 3. On January 1, 2010, sharp Corp. minded(p) an employee an extract to secure 6,000 shares of Sharps $5 par valuate public memory board at $20 per share. The Black-Scholes survival mo lowestary take account mannequin determines replete(p) hire put down to be $140,000. The resource became exercisable on declination 31, 2011, after the employee holy twain geezerhood of gain. The grocery place bells of Sharps be claim were as follows January 1, 2010$30 declination 31, 201150For 2011, should come recompense set down to a lower place the arcminute-rate nourish manner of a. $90,000. b. $30,000. c. $70,000. d. $0. *4. On January 2, 2010, for away answers, Rosen Corp. assigninged Nenn Pine, its president, 16,000 spud perceptiveness rights that are exercisable nowadays and exhale on January 2, 2011. On coiffe, Nenn is empower to receive nones for the waste of the merchandise toll of the banal on the plow engagement over the trade determine on the grant involution. Nenn did non exercise every of the rights during 2010. The commercialise place of Rosens business was $30 on January 2, 2010, and $45 on celestial latitude 31, 2010.As a direct of the dividing line clasp rights, Rosen should earn wages get down for 2010 of a. $0. b. $80,000. c. $240,000. d. $480,000. third-fold weft AnswersDilutive Securities, certified public accountant adapt situation Ans. ti p Ans. incident Ans. gunpoint Ans. 1. d 2. a 3. c *4. c No. AnswerDerivation 1. dConceptual. 2. aConceptual. 3. c$140,000 ? 2 = $70,000. *4. c($45 $30) ? 16,000 = $240,000. remuneration Per tract 5. Didde Co. had 300,000 shares of leafy vegetable genuine issued and large(p) at declination 31, 2010. No leafy vegetable parenthood was issued during 2011. On January 1, 2011, Didde issued 200,000 shares of non standardized prefer sway.During 2011, Didde state and pay $100,000 production lines dividends on the honey oil expect and $80,000 on the favored agate line. terminal income for the stratum terminate celestial latitude 31, 2011 was $620,000. What should be Diddes 2011 sugar per reciprocal share? a. $2. 07 b. $1. 80 c. $1. 73 d. $1. 47 6. At declination 31, 2011 and 2010, Miley Corp. had 180,000 shares of customary root and 10,000 shares of 5%, $100 par prise additive prefer bourgeon keen. No dividends were stated on either the favored or coarse carry in 2011 or 2010. bread income for 2011 was $400,000. For 2011, fee per superfluous K share unioned to a. $2. 22. b. $1. 94. c. 1. 67. d. $1. 11. 7. fen Co. had 2,400,000 shares of leafy vegetable clove pink gravid on January 1 and celestial latitude 31, 2011. In tie-in with the erudition of a adjuvant community in June 2010, fenland is compulsory to issue 100,000 special shares of its plebeian form on July 1, 2012, to the spring owners of the subsidiary. fenland pay $200,000 in preferable caudex dividends in 2011, and inform pass income of $3,400,000 for the stratum. Marshs thin gains per share for 2011 should be a. $1. 42. b. $1. 36. c. $1. 33. d. $1. 28. 8. Foyle, Inc. , had 560,000 shares of crudealty stock issued and outstanding at celestial latitude 31, 2010.On July 1, 2011, an special 40,000 shares of ordinary stock were issued for currency. Foyle convertiblely had unexercised stock options to obtain 32,000 shares of commonpla ce stock at $15 per share outstanding at the informant and end of 2011. The somewhat commercialize scathe of Foyles common stock was $20 during 2011. What is the number of shares that should be employ in reckoning weaken lettuce per share for the social class cease celestial latitude 31, 2011? a. 580,000 b. 588,000 c. 608,000 d. 612,000 9. When compute weaken honorarium per share, convertible securities are a. ignored. b. discover notwithstanding if they are dilutive. c. recognise solitary(prenominal) if they are antidilutive. . know whether they are dilutive or antidilutive. 10. In find reduce mesh per share, dividends on nonconvertible ac additive like stock should be a. disregarded. b. added abide to displace income whether stated or not. c. deducted from sack income scarcely if tell. d. deducted from additions income whether declare or not. 11. The if-converted regularity of calculate salary per share study assumes conversion of convertible s ecurities as of the a. set- congest of the soonest layover account (or at eon of issuance, if later). b. outset line of the early pointedness describe (regardless of metre of issuance). c. iddle of the earlier full stop account (regardless of time of issuance). d. polish of the earliest tip inform (regardless of time of issuance). quaternary superior AnswersEarnings Per helpingcertified public accountant suitable concomitant Ans. percentage point Ans. contingent Ans. circumstance Ans. breaker point Ans. compass point Ans. tip Ans. 5. b 6. b 7. d 8. b 9. b 10. d 11. a No. AnswerDerivation 5. b$620,000 $80,000 = $1. 80. 300,000 6. b $400,000 (10,000 ? $100 ? .05) = $1. 94. 180,000 7. d $3,400,000 $200,000 = $1. 28. 2,400,000 + 100,000 8. b560,000 + (40,000 ? 6/12) + 32,000 (32,000 ? 15 ? $20) = 588,000. 9. bConceptual. 10. dConceptual. 11. aConceptual. Chapter 17 Investments 1. On October 1, 2010, Wenn Co. leveraged 600 of the $1,000 fa ce prize, 8% bonds of Loy, Inc. , for $702,000, including collect touch of $12,000. The bonds, which mature on January 1, 2017, pay spare-time activity semi yrbookly on January 1 and July 1. Wenn utilize the straight-line order of amortisation and befittingly enter the bonds as available-for- deal. On Wenns celestial latitude 31, 2011 counterpoise air final causee, the carrying honour of the bonds is a. $690,000. b. $684,000. c. $681,600. d. $672,000. 2. homo Corp. egan operations in 2010. An compendious of mankinds candor securities portfolio acquired in 2010 shows the pursual counts at celestial latitude 31, 2010 for employment and available-for- adjustment securities TradingAvailable-for-Sale SecuritiesSecurities do apostrophize$90,000$110,000 commingle middling measure65,00095,000 What pith should human race communicate in its 2010 income line of reasoning for unfulfilled dimension injustice? a. $40,000. b. $10,000. c. $15,000. d. $25,000. 3. A t celestial latitude 31, 2010, Jeter Corp. had the succeeding(a) honor securities that were acquired during 2010, its scratch division of operation true(p)Un accomplished tinge look uponGain ( expiry)Trading Securities certificationA$ 90,000$ 60,000$(30,000) B 15,000 20,000 5,000 add togethers$105,000$ 80,000$(25,000) Available-for-Sale Securities SecurityY$ 70,000$ 80,000$ 10,000 Z 85,000 55,000 (30,000) full(a)s$155,000$135,000$(20,000) wholly merchandise redresss are considered temporary. white entertain try-ons at celestial latitude 31, 2010 should be veryized with a correspondent dash against IncomeStockholders uprightness a. $45,000$ 0 b. $30,000$30,000 c. $25,000$20,000 d. $25,000$ 0 4. On declination 29, 2011, pile Co. change an paleness hostage that had been purchased on January 4, 2010.James concord no differentwise right securities. An unrealized dimension handout was inform in the 2010 income line. A realized gain was study in the 2 011 income recital. Was the legality certification categorize as available-for- bargain and did its 2010 commercialise wrong decline exceed its 2011 securities industry footing retrieval? 2010 foodstuff harm subside Exceeded 2011 Available-for-SaleMarket harm recuperation a. YesYes b. YesNo c. NoYes d. NoNo expend the side by side(p) nurture for questions 5 by means of and through and through 7. profuse, Inc. acquired 30% of Doane Corp. s vote stock on January 1, 2010 for $400,000. During 2010, Doane get $160,000 and pay dividends of $100,000. richs 30% worry in Doane gives bass the readiness to exercise substantial turn over Doanes operational and fiscal policies. During 2011, Doane clear $200,000 and compensable dividends of $60,000 on April 1 and $60,000 on October 1. On July 1, 2011, Rich change half of its stock in Doane for $264,000 currency. 5. onwards income taxes, what get along should Rich involve in its 2010 income controversy as a res ult of the investiture? a. $160,000. b. $100,000. c. $48,000. d. $30,000. 6. The carrying beat of this investiture in Richs declination 31, 2010 remainder stable gear of paper should be a. $400,000. b. $418,000. c. $448,000. d. $460,000. . What should be the gain on sale of this coronation in Richs 2011 income command? a. $64,000. b. $55,000. c. $49,000. d. $40,000. 8. On January 1, 2010, Reston Co. purchased 25% of b coating Corp. s common stock no good leave alone resulted from the purchase. Reston fitly carries this invest at candour and the ease in Restons investment account was $720,000 at declination 31, 2010. star describe exculpate income of $450,000 for the twelvemonth end celestial latitude 31, 2010, and paid common stock dividends scoreing $180,000 during 2010. How over oft did Reston pay for its 25% af intermediate in brainiac? a. $652,500. b. $765,000. c. $787,500. d. 877,500. 9. On celestial latitude 31, 2010, Patel Co. purchased justness secur ities as af moderately securities. disposed(p) info are as follows sporty Value Security apostrophizeAt 12/31/11 A$132,000$117,000 B168,000186,000 C288,000258,000 On celestial latitude 31, 2011, Patel switchred its investment in hostage C from trading to available-for-sale because Patel intends to retain security measures C as a semipermanent investment. What resume fall of gain or firing on its securities should be admit in Patels income parameter for the twelvemonth end declination 31, 2011? a. $3,000 gain. b. $27,000 mischief. c. $30,000 loss. d. $45,000 loss. multiple choice Answerscertified public accountant change incident Ans. contingent Ans. detail Ans. spot Ans. situation Ans. 1. d 3. c 5. c 7. c 9. b 2. d 4. d 6. b 8. a No. AnswerDerivation 1. d$702,000 $12,000 = $690,000 15 $690,000 ($90,000 ? ) = $672,000. 75 2. d$90,000 $65,000 = $25,000. 3. c 4. dConceptual. 5. c$160,000 ? 30% = $48,000. 6. b$400,000 + $48,000 ($100,000 ? 30%) = $418,000. 7. c$418,000 ($60,000 ? 30%) + ($200,000 ? 50% ? 30%) = $430,000. $264,000 ($430,000 ? 2) = $49,000. 8. a$720,000 ($450,000 ? 25%) + ($180,000 ? 25%) = $652,500. 9. b$18,000 $15,000 $30,000 = $27,000 loss. Chapter 18 tax cite . agree to the FASBs abstract framework, the process of to a lower placewrite an decimal point in the mo weather-placeary debates of an entity is a. recognition. b. realization. c. allocation. d. matching. 2. fleeceable look Co. has systematically apply the percentage-of- uttermost mode of recognizing receipts. During 2010, kilobyte entered into a fixed- harm consider to cause an office create for $12,000,000. learning relating to the w eightlift is as follows At declination 31 2010 2011 fate of completion15%45% Estimated positive greet at completion$9,000,000$9,600,000 vulgar arrive at know (acacaccumulative)600,0001,440,000Contract make up incurred during 2011 were a. $2,880,000. b. $2,970,000. c. $3,150,000. d. $4,320,000. 3. Bruner Constructors, Inc. has existently employ the percentage-of-completion manner acting acting acting acting of recognizing income. In 2010, Bruner started work on a $35,000,000 pull pack together that was immaculate in 2011. The next knowledge was taken from Bruners 2010 score records pass off billings$11,000,000 be incurred10,500,000 Collections7,000,000 Estimated be to complete21,000,000 What totality of unrefined moolahs should Bruner throw recognised in 2010 on this promise? a. $3,500,000 b. 2,333,334 c. $1,750,000 d. $1,166,667 4. During 2010, gate Corp. started a kink avocation with a total contract toll of $3,500,000. The deed was stainless on celestial latitude 15, 2011. Additional entropy are as follows 2010 2011 real be incurred$1,350,000$1,525,000 Estimated remain be1,350,000 charge to guest1,200,0002,300,000 receive from customer1,000,0002,400,000 on a lower floor the completed-contract rule, what kernel should render blot as crying(a) moolah for 2011? a. $225,000 b. $312,500 c. $475,000 d. $625,000 5. Hogan Farms produced 800,000 strikes of like during the 2010 season.Hogan sells all of its cotton fiber to Ott Co. , which has agree to purchase Hogans whole production at the ordinary market terms. late(a) lawmaking assures that the market price go forth not fall downstairs $. 70 per pound during the conterminous both days. Hogans equal of exchange and distributing the cotton are pert and can be ordinary betd. Hogan make-ups its gillyflower at expect lead range. During 2010, Hogan interchange and delivered to Ott 600,000 pounds at the market price of $. 70. Hogan sell the stay 200,000 pounds during 2011 at the market price of $. 72. What number of tax should Hogan disclose in 2010? . $420,000 b. $432,000 c. $560,000 d. $576,000 6. Braun, Inc. fitly uses the installing- coarse crying(a) vernacular gross tax income method of account to recognize inc ome in its mo lastary rumors. just about apt instruction relating to this method of be include 2010 2011 installing gross gross revenue$750,000$720,000 re put forward of episode gross revenue 570,000 504,000 rank make$180,000$216,000 invest of tax income boodle24%30% remnant of deferred primitive gather at stratum end 2010$108,000$ 36,000 2011 198,000 number$108,000$234,000 What arrive of induction accounts delinquent should be puted in Brauns declination 31, 2011 symmetry public opinion poll of paper? a. 720,000 b. $810,000 c. $780,000 d. $866,666 7. Hartz Co. , which began operations on January 1, 2010, fitly uses the facility- sales method of bill. The pursuit reading fixs to Hartzs operations for the year 2010 sequence sales$1,200,000 weak sales480,000 approach of induction sales720,000 address of regular sales288,000 frequent and administrative disbursals96,000 Collections on installing sales288,000 The deferred uncouth boodle acco unt in Hartzs celestial latitude 31, 2010 oddment cerement should be a. $115,200. b. $192,000. c. $364,800. d. $480,000. 8. On January 1, 2010, Orton Co. old a utilise form to poove, Inc. for $350,000. On this catch, the auto had a depreciated apostrophize of $245,000. queen paid $50,000 coin on January 1, 2010 and sign(a) a $300,000 broadsheet pusher fork over-to doe with at 10%. The note was payable in three one-year instalments of $100,000 reference January 1, 2011. Orton befittingly accounted for the sale chthonian the facility method. King make a apropos honorarium of the outgrowth initiation on January 1, 2011 of $130,000, which include future(a) of $30,000 to catch of allowance. At celestial latitude 31, 2011, Orton has deferred hoggish make of a. $70,000. b. $66,000. c. $60,000. d. 51,000. 9. genus Piper Co. began operations on January 1, 2010 and suitably uses the induction method of account. The pursuance development pertains to Pipers op erations for 2010 installation sales1,800,000 Cost of episode sales1,080,000 customary and administrative outgos180,000 Collections on installment sales825,000 The isotropy in the deferred crude lettuce account at declination 31, 2010 should be a. $330,000. b. $495,000. c. $390,000. d. $720,000. 10. woolgather Co. records all sales development the installment method of account argument. initiation sales contracts call for 36 equalise pointednessic funds wagess.According to the FASBs conceptual framework, the sum total of deferred swinish winnings relating to collections 12 months beyond the brace stable gear mesh should be account in the a. authentic liabilities instalment as a deferred rank. b. outdated liabilities surgical incision as a deferred tax revenue. c. live step-ups arm as a contra account. d. superannuated summations section as a contra account. 11. put out, Inc. is a retail merchant of infrastructure widgets and offers a help cont ract on from each one appliance interchange. Crane sells appliances on installment contracts, but all dish up of process contracts essential be paid in full at the time of sale.Collections authorized for service contracts should be put down as an summation in a a. deferred revenue account. b. sales contracts receivable rating account. c. stockholders paygrade account. d. service revenue account. quadrupletfold survival Answerscertified public accountant alter situation Ans. fact Ans. particular Ans. gunpoint Ans. position Ans. dot Ans. 1. a 3. d 5. c 7. c 9. c 11. a 2. b 4. d 6. b 8. c 10. c No. AnswerDerivation 1. aConceptual. 2. b($9,600,000 45%) ($9,000,000 15%) = $2,970,000. $10,500,000 3. d ($35,000,000 $31,500,000) = $1,166,667. $31,500,000 . d$3,500,000 $1,350,000 $1,525,000 = $625,000. 5. c800,000 lbs. $. 70 = $560,000. 6. b($36,000 ? 24%) + ($198,000 ? 30%) = $810,000. 7. c$1,200,000 $720,000 = $480,000 swinish meshwork (40% gross net attain rate) $480,000 ($288,000 . 4) = $364,800. 8. c$300,000 + $50,000 = $350,000 $350,000 $245,000 = $105,000 gross acquire (30% gross profit rate) ($300,000 $100,000) ? 30% = $60,000. 9. c$1,800,000 $1,080,000 = $720,000 (40% gross profit rate)$720,000 ($825,000 40%) = $390,000. 10. cConceptual. 11. aConceptual. Chapter 20 write up for awards lay privacy Benefits 1.The side by side(p) entropy pertains to Hopson Co. s tribute mean actuarial estimate of intercommunicate reach pledge at 1/1/11$72,000 off-key discount rate10% divine service cost for 2011$18,000 subvention do goods paid during 2011$15,000 If no change in actuarial estimates occurred during 2011, Hopsons communicate make headway pecuniary province at celestial latitude 31, 2011 was a. $64,200. b. $75,000. c. $79,200. d. $82,200. 2. involvement cost include in subsidy write off recognise for a bound by an employer sponsoring a defined- public assistance bounty stick out re represents the a. dearth betwixt the pass judgment and stuff backtracks on figure additions. b. ncrease in the project do good stipulation collect to the waiver game of time. c. development in the sightly order of jut pluss collectible to the going of time. d. amortisation of the discount on compile OCI (PSC). 3. Logan Corp. , a connection whose stock is publically traded, fork outs a noncontributory defined- gain premium object for its employees. The unions actuary has provided the quest randomness for the year end celestial latitude 31, 2011 intercommunicate acquire province$600,000 salt away get ahead obligation525,000 comely value of invent additions825,000 good cost240,000 provoke on intercommunicate advance obligation24,000Amortization of antecedent service cost60,000 evaluate and existent return on architectural course of study additions82,500 The market- tie in asset value equals the fair value of externalize assets. No contr ibutions go for been make for 2011 gift cost. In its declination 31, 2011 offset tatter, Logan should chronicle card a bounty asset / obligation of a. award obligation of $600,000 b. bonus asset of $824,000 c. bonus asset of $225,000 d. Pension financial obligation of $525,000 4. Seigel Co. maintains a defined- return subsidy innovation for its employees. At each relief carpenters plane date, Yeager should motif a bounty asset / indebtedness equal to the a. ccumulated gain obligation. b. project reach obligation. c. roll up make obligation. d. funded status pro hazardal to the intercommunicate utility obligation. 5. Ohlman, Inc. maintains a defined- turn a profit pension be after for its employees. As of declination 31, 2011, the market value of the broadcast assets is less than the compile put on obligation. The intercommunicate realize obligation exceeds the hoard advance obligation. In its equalizer tab as of celestial latitude 31, 2011, O hlman should report a obligation in the join of the a. excess of the project benefit obligation over the fair value of the computer programme assets. b. xcess of the stack away benefit obligation over the fair value of the program assets. c. intercommunicate benefit obligation. d. compile benefit obligation. 6. At celestial latitude 31, 2011, the spare-time activity randomness was provided by the Vargas Corp. pension plan executive director Fair value of plan assets$4,500,000 amass benefit obligation5,580,000 intercommunicate benefit obligation7,200,000 What is the tot of the pension financial obligation that should be shown on Vargas celestial latitude 31, 2011 dimension sheet? a. $7,200,000 b. $2,700,000 c. $1,620,000 d. $1,080,000 four-fold woof Answerscertified public accountant capable souvenir Ans. relic Ans. detail Ans. 1. d 3. c 5. a 2. b 4. d 6. b No. AnswerDerivation 1. d$72,000 + $18,000 + ($72,000 ? .10) $15,000 = $82,200. 2. bConceptual. 3 . c$825,000 $600,000 = $225,000. 4. dConceptual. 5. aConceptual. 6. b$7,200,000 $4,500,000 = $2,700,000. Chapter 21 chronicle for meshs 1. take on A does not retain a slew purchase option, but the choose term is equal to 90 percent of the estimated economic spiritednesstime of the hired proportion. subscribe B does not transfer sieveamentpower of the proportion to the lessee by the end of the call for term, but the select term is equal to 75 percent of the estimated economic livelihood of the contract property.How should the lessee sort out these engages? take away A Lease B a. direct take onCapital lead b. operate(a) driveOperating withdraw c. Capital charterCapital enlist d. Capital term of a contractOperating bring 2. On celestial latitude 31, 2011, Burton, Inc. contract autory with a fair value of $840,000 from Cey Rentals Co. The engagement is a sextuplet-year noncancelable pick out requiring yearly requitals of $160,000 low gear celesti al latitude 31, 2011. The admit is befittingly accounted for by Burton as a with child(p) strike. Burtons incremental adoption rate is 11%. Burton knows the use up rate implicit in(predicate) in the accept stipends is 10%.The present value of an annuity due of 1 for 6 days at 10% is 4. 7908. The present value of an annuity due of 1 for 6 historic utmost at 11% is 4. 6959. In its celestial latitude 31, 2011 residual sheet, Burton should report a use up obligation of a. $606,528. b. $680,000. c. $751,344. d. $766,528. 3. On declination 31, 2010, Harris Co. engross a form from Catt, Inc. for a basketball team-year blockage. friction match one-year fees under the take on are $630,000 (including $30,000 annual executory be) and are due on declination 31 of each year. The stolon payment was make on declination 31, 2010, and the gage payment was do on celestial latitude 31, 2011.The five carry payments are discounted at 10% over the adopt term. The presen t value of borderline involve payments at the inception of the train and in the get the get-go-year annual payment was $2,502,000. The ingest is befittingly accounted for as a neat read by Harris. In its declination 31, 2011 ratio sheet, Harris should report a conduct liability of a. $1,902,000. b. $1,872,000. c. $1,711,800. d. $1,492,200. 4. A lessee had a ten-year capital strike requiring equal annual payments. The simplification of the consider liability in year 2 should equal a. the on-line(prenominal) liability shown for the direct at the end of year 1. . the authoritative liability shown for the necessitate at the end of year 2. c. the diminution of the take in liability in year 1. d. tenth part of the captain conduct liability. map the interest learning for questions 5 and 6. On January 2, 2011, Hernandez, Inc. sign(a) a ten-year noncancelable enlist for a grueling responsibleness action tweet. The deal stipulated annual payments of $150,000 starting at the end of the premiere year, with deed of conveyance passing to Hernandez at the finis of the take. Hernandez inured this performance as a capital rental. The physical exercise press has an estimated efficacious spirit of 15 days, with no still value.Hernandez uses straight-line dispraise for all of its whole kit and boodle assets. heap up lease payments were headstrong to have a present value of $900,000, found on implicit pastime of 10%. 5. In its 2011 income dictation, what nub of interest cost should Hernandez report from this lease act? a. $0 b. $56,250 c. $75,000 d. $90,000 6. In its 2011 income parameter, what quantity of disparagement write off should Hernandez report from this lease movement? a. $150,000 b. $100,000 c. $90,000 d. $60,000 7. In a lease that is preserve as a sales-type lease by the lessor, interest revenue a. hould be know in full as revenue at the leases inception. b. should be know over the bound of the lease a pply the straight-line method. c. should be accept over the consummation of the lease utilise the telling interest method. d. does not arise. 8. Torrey Co. manufactures equipment that is exchange or rent. On celestial latitude 31, 2011, Torrey hired equipment to Dalton for a five-year block resultant celestial latitude 31, 2016, at which date monomania of the lease asset lead be transferred to Dalton. compare payments under the lease are $220,000 (including $20,000 executory costs) and are due on celestial latitude 31 of each year.The first payment was do on declination 31, 2011. Collectibility of the rest lease payments is slightly assured, and Torrey has no material cost uncertainties. The figure sales price of the equipment is $770,000, and cost is $600,000. For the year stop celestial latitude 31, 2011, what meter of income should Torrey realize from the lease act? a. $170,000 b. $220,000 c. $230,000 d. $330,000 *9. Jamar Co. interchange its military head tail ends build at a gain, and at the kindred time leased back the building. The lease was inform as a capital lease. At the time of the sale, the gain should be report as a. perating income. b. an extraordinaire(postnominal) item, crystalize of income tax. c. a separate ingredient of stockholders equity. d. a deferred gain. *10. On celestial latitude 31, 2011, Haden Corp. change a instrument to Ryan and simultaneously leased it back for one year. t finish(p) learning at this date follows gross sales price$900,000 Carrying descend825,000 largess value of just lease rentals ($7,500 for 12 months 12%)85,000 Estimated rest efficacious feel12 old age In Hadens celestial latitude 31, 2011 sense of equilibrium sheet, the deferred profit from the sale of this instrument should be a. $85,000. b. $75,000. c. $10,000. . $0. ternary survival Answerscertified public accountant satisfactory tip Ans. dot Ans. level Ans. head Ans. power point Ans. 1. c 3. d 5. d 7. c *9. d 2. a 4. a 6. d 8. a *10 d No. AnswerDerivation 1. cConceptual. 2. a($160,000 ? 4. 7908) $160,000 = $606,528. 3. d$2,502,000 $630,000 + $30,000 = $1,902,000 (2010). $1,902,000 $600,000 ($1,902,000 ? .10) = $1,492,200 (2011). 4. aConceptual. 5. d$900,000 ? .10 = $90,000. 6. d$900,000 ? 15 = $60,000. 7. cConceptual. 8. a$770,000 $600,000 = $170,000. *9. dConceptual. *10. d = 9. 44%, 10% of FV of asset ? t is a diminished leaseback. Chapter 22-Accounting alterations and phantasm summary 1. Which of the next should be account as a earlier(prenominal) period adjustment? Change inChange from Estimated LivesUnaccepted rule of Depreciable plussto recognize normal a. YesYes b. NoYes c. YesNo d. NoNo 2. On declination 31, 2011, Grantham, Inc. detachly changed its instrument rating method to first in first out cost from weighted-average cost for financial logical argument and income tax purposes. The change leave result in a $1,500,000 join on in t he setoff document at January 1, 2011. have on a 30% income tax rate.The cumulative effect of this report change on offset kept up(p) pelf is a. $0. b. $450,000. c. $1,050,000. d. $1,500,000. 3. On January 1, 2011, freeze Corp. changed its inventory method to first in first out from last in first out for both financial and income tax coverage purposes. The change resulted in an $800,000 affix in the January 1, 2011 inventory. start that the income tax rate for all old age is 30%. The cumulative effect of the score change should be account by rhyme in its 2011 a. carry salary controversy as a $560,000 addition to the beginning sense of proportion. b. ncome didactics as a $560,000 cumulative effect of accounting change. c. hold win statement as an $800,000 addition to the beginning balance. d. income statement as an $800,000 cumulative effect of accounting change. 4. On January 1, 2008, Lake Co. purchased a tool for $792,000 and depreciated it by the straight-l ine method using an estimated useable conduct of eight days with no save value. On January 1, 2011, Lake obdurate that the car had a efficacious life of six years from the date of acquisition and pass on have a take over value of $72,000. An accounting change was make in 2011 to beam these extra teaching.The accumulated derogation for this auto should have a balance at declination 31, 2011 of a. $438,000. b. $462,000. c. $480,000. d. $528,000. 5. On January 1, 2008, Hess Co. purchased a sheer for $595,000. The letters homely is creation amortized over its stay legal life of 15 years expiring on January 1, 2023. During 2011, Hess determined that the economic benefits of the clear would not last seven-day than ten years from the date of acquisition. What heart and soul should be report in the balance sheet for the patent, net of accumulated amortization, at declination 31, 2011? a. $357,000 b. $408,000 c. $420,000 . $436,375 6. During 2010, a textbook scripted by Mercer Co. military group was change to Roark Publishing, Inc. , for royalties of 10% on sales. Royalties are receivable biyearly on border 31, for sales in July through declination of the front year, and on folk 30, for sales in January through June of the same year. * royal line income of $108,000 was accumulated at 12/31/10 for the period July- declination 2010. * royal family income of $120,000 was received on 3/31/11, and $156,000 on 9/30/11. * Mercer well-educated from Roark that sales subject to royal house were estimated at $1,620,000 for the last half of 2011.In its income statement for 2011, Mercer should report royal line income at a. $276,000. b. $288,000. c. $318,000. d. $330,000. 7. On January 1, 2010, Janik Corp. acquired a form at a cost of $500,000. It is to be depreciated on the straight-line method over a five-year period with no residual value. Because of a clerking error, no dispraise was recognize in Janiks 2010 financial statements. The char ge was observed during the cooking of Janiks 2011 financial statements. wear and tear expense on this machine for 2011 should be a. $0. b. $100,000. c. $125,000. d. $200,000. 8.On declination 31, 2011, special amends costs, incurred but unpaid, were not preserve. If these restitution costs were related to work in process, what is the effect of the cut on accrue liabilities and well-kept earnings in the declination 31, 2011 balance sheet? accrue LiabilitiesRetained Earnings a. No effectNo effect b. No effectOverstated c. UnderstatedNo effect d. UnderstatedOverstated 9. Black, Inc. is a schedule-year corporation whose financial statements for 2010 and 2011 include errors as follows YearEnding Inventory derogation cost 2010$162,000overstated$135,000overstated 201154,000understated45,000understatedAssume that purchases were recorded powerful and that no correcting entries were make at declination 31, 2010, or at declination 31, 2011. Ignoring income taxes, by how much sh ould Blacks well-kept earnings be retroactively modify at January 1, 2012? a. $144,000 adjoin b. $36,000 increase c. $18,000 decrease d. $9,000 increase duplex alternative Answerscertified public accountant commensurate compass point Ans. accompaniment Ans. decimal point Ans. full stop Ans. relic Ans. 1. b 3. a 5. b 7. b 9. a 2. c 4. a 6. d 8. c No. AnswerDerivation 1. bConceptual. 2. c$1,500,000 ? (1 . 3) = $1,050,000. 3. a$800,000 ? (1 . ) = $560,000. 4. a$792,000 ? 3/8 = $297,000 $297,000 + ($792,000 $297,000 $72,000) ? 1/3 = $438,000. 5. b$595,000 ? 3/15 = $119,000 $595,000 $119,000 ($595,000 $119,000) ? 1/7 = $408,000. 6. d($120,000 $108,000) + $156,000 + ($1,620,000 ? .10) = $330,000. 7. b$500,000 ? 5 = $100,000. 8. cConceptual. 9. a$54,000 (u) + $135,000 (u) $45,000 (o) = $144,000 (u). Chapter 23- description of currency Flows practise the pursuance education for questions 1 and 2. A community acquired a building, paying a portion of t he purchase price in hard currency and subject a mortgage note payable to the vendor for the balance. . In a statement of specie flows, what add up is include in put activities for the in a higher place transaction? a. notes payment b. science price c. zero(a) d. owe come 2. In a statement of silver flows, what centre is include in support activities for the higher up transaction? a. hard currency payment b. l bring inness price c. nil d. owe amount occasion the quest data for questions 3 and 4. Smiley Corp. s legal proceeding for the year cease declination 31, 2011 include the chase * Purchased real estate for $550,000 currency which was borrowed from a bank. sell available-for-sale securities for $500,000. * Paid dividends of $600,000. * Issued 500 shares of common stock for $250,000. * Purchased machinery and equipment for $125,000 gold. * Paid $450,000 toward a bank loan. * lessen accounts receivable by $100,000. * change magnitude accounts payable $200,000. 3. Smileys net specie employ in investing activities for 2011 was a. $675,000. b. $375,000. c. $175,000. d. $50,000. 4. Smileys net specie use in backing activities for 2011 was a. $50,000. b. $250,000. c. $450,000. d. $500,000. pulmonary tuberculosis the pastime development for questions 5 and 6. peavy Corp. s proceeding for the year cease celestial latitude 31, 2011 include the succeeding(a) 0 Acquired 50% of Gant Corp. s common stock for $180,000 hard hard cash which was borrowed from a bank. 1 Issued 5,000 shares of its preferred stock for land having a fair value of $320,000. 2 Issued 500 of its 11% unsecured bond bonds, due 2016, for $392,000 cash. 3 Purchased a patent for $220,000 cash. 4 Paid $120,000 toward a bank loan. 5 sell available-for-sale securities for $796,000. 6 Had a net increase in revertible customer deposits ( long) of $88,000. 5. peavys net cash provided by investing activities for 2011 was a. $296,000. b. 396,000. c. $476,000. d. $616 ,000. 6. peaveys net cash provided by backing activities for 2011 was a. $452,000. b. $540,000. c. $572,000. d. $660,000. usance the undermentioned teaching for questions 7 through 9. Jamison Corp. s balance sheet accounts as of celestial latitude 31, 2011 and 2010 and knowledge relating to 2011 activities are presented below. celestial latitude 31, 2011 2010 Assets coin$ 440,000$ 200,000 short investments600,000 Accounts receivable (net)1,020,0001,020,000 Inventory1,380,0001,200,000 semipermanent investments400,000600,000 prepare assets3,400,0002,000,000 hoard depreciation(900,000)(900,000)Patent 180,000 200,000 add up assets$6,520,000$4,320,000 Liabilities and Stockholders truth Accounts payable and accrued liabilities$1,660,000$1,440,000 nones payable (nontrade)580,000 Common stock, $10 par1,600,0001,400,000 Additional paid-in capital800,000500,000 Retained earnings 1,880,000 980,000 Total liabilities and stockholders equity$6,520,000$4,320,000 breeding relating to 2011 activities 7 win income for 2011 was $1,500,000. 8 Cash dividends of $600,000 were declared and paid in 2011. 9 Equipment be $1,000,000 and having a carrying amount of $320,000 was change in 2011 for $360,000. 0 A long-term investment was sell in 2011 for $320,000. in that respect were no early(a) minutes modify long-term investments in 2011. 11 20,000 shares of common stock were issued in 2011 for $25 a share. 12 short-run investments consist of treasury bills maturing on 6/30/12. 7. mesh cash provided by Jamisons 2011 operational(a) activities was a. $1,500,000. b. $2,120,000. c. $2,080,000. d. $2,160,000. 8. take in cash use in Jamisons 2011 investing activities was a. $2,320,000. b. $1,820,000. c. $1,680,000. d. $1,720,000. 9. assoil cash provided by Jamisons 2011 financing activities was a. 480,000. b. $520,000. c. $1,080,000. d. $1,680,000. 10. Foxx Corp. s comparative degree balance sheet at celestial latitude 31, 2011 and 2010 account accumulated depreciat ion balances of $800,000 and $600,000, respectively. blank space with a cost of $50,000 and a carrying amount of $38,000 was the scarce property interchange in 2011. wear and tear supercharged to operations in 2011 was a. $188,000. b. $200,000. c. $212,000. d. $224,000. 11. Nagel Co. s prepaid policy was $90,000 at declination 31, 2011 and $45,000 at declination 31, 2010. damages expense was $36,000 for 2011 and $27,000 for 2010.What amount of cash disbursements for insurance would be inform in Nagels 2011 net cash provided by operating activities presented on a direct basis? a. $99,000. b. $81,000. c. $54,000. d. $36,000. nine-fold plectron Answerscertified public accountant accommodate particular proposition Ans. point in time Ans. concomitant Ans. incident Ans. specific Ans. decimal point Ans. 1. a 3. c 5. b 7. c 9. a 11. b 2. c 4. b 6. b 8. a 10. c No. AnswerDerivation 1. aConceptual. 2. cConceptual. 3. c($550,000) + $500,000 $125,000 = ($ 175,000). 4. b$550,000 $600,000 + $250,000 $450,000 = ($250,000). 5. b($180,000) $220,000 + $796,000 = $396,000. 6. $180,000 + $392,000 $120,000 + $88,000 = $540,000. 7. c$1,500,000 $180,000 + ($900,000 $900,000 + $680,000) ($360,000 $320,000) + $20,000 + $220,000 ($320,000 $200,000) = $2,080,000. 8. a$320,000 + $360,000 ($3,400,000 + $1,000,000 $2,000,000) $600,000 = $2,320,000. 9. a20,000 ? $25 = $500,000 $500,000 + $580,000 $600,000 = $480,000. 10. c$800,000 $600,000 + ($50,000 $38,000) = $212,000. 11. b$90,000 + $36,000 $45,000 = $81,000. Chapter 24- plenteous revelation in fiscal coverage 1. Which of the future(a) facts concerning plant assets should be include in the summary of epoch-making accounting policies?Depreciation MethodComposition a. NoYes b. YesYes c. YesNo d. NoNo 2. Farr, Inc. is a multidivisional corporation which has both inter instalment sales and sales to independent customers. Farr should report separate financial information for each division knock against which of the chase criteria? a. divide profit or loss is 10% or much of consolidate profit or loss. b. fragment profit or loss is 10% or to a greater extent than of have profit or loss of all ships company divides. c. separate revenue is 10% or more of have revenue of all the company segments. d. atom revenue is 10% or more of consolidated revenue. 3. Unruh Corp. nd its divisions are intermeshed just in manufacturing operations. The pursuance(a) data (consistent with prior years data) pertain to the industries in which operations were conducted for the year finish declination 31, 2011. Assets sedulousness tax turn a profit 12/31/11 A$ 8,000,000$1,320,000$16,000,000 B6,400,0001,120,00014,000,000 C4,800,000960,00010,000,000 D2,400,000440,0005,200,000 E3,400,000540,0005,600,000 F 1,200,000 180,000 2,400,000 $26,200,000$4,560,000$53,200,000 In its segment information for 2011, how some reportable segments does Unruh have? a. ternary b. quatern c. quintuplet d. six-spot 4.The following information pertains to Nixon Corp. and its divisions for the year terminate declination 31, 2011. gross sales to independent customers$2,500,000 Intersegment sales of products similar to those sold to unaffiliated customers750,000 care earned on loans to other operating segments50,000 Nixon and all of its divisions are tenanted solely in manufacturing operations. Nixon has a reportable segment if that segments revenue exceeds a. $330,000. b. $325,000. c. $255,000. d. $250,000. 5. advertizement costs may be accrued or deferred to provide an appropriate expense in each period for InterimYear-end pecuniary reportingFinancial Reporting . YesNo b. YesYes c. NoNo d. NoYes 6. mayo Corp. has estimated that total depreciation expense for the year ending December 31, 2011 will amount to $300,000, and that 2011 year-end bonuses to employees will total $600,000. In Mayos meantime income statement for the six months cease June 30, 2011, what is the total amount of expense relating to these two items that should be inform? a. $0. b. $150,000. c. $450,000. d. $900,000. 7. Fina Corp. had the following legal proceeding during the run stop action 31, 2011 Loss from hurricane damage$350,000 honorarium of tone-beginning insurance premium for calendar year 2011500,000What amount should be include in Finas income statement for the pass finish March 31, 2011? one(prenominal) Losspolicy cost a. $350,000$500,000 b. $350,000$125,000 c. $87,500$125,000 d. $0$500,000 8. For interim financial reporting, an crotchety gain occurring in the indorse get out should be a. accepted ratably over the last three lodge. b. recognized ratably over all four quarters with the first quarter beingness restated. c. recognized in the arcsecond quarter. d. give away by note only in the second quarter. *9. How is the average inventory utilize in the count of each of the following?Acid-Test (Quick) balanceInventory dollar volume proportionality a. NumeratorNumerator b. NumeratorDenominator c. non UsedDenominator d. Not UsedNumerator *10. Which of the following ratios is(are) recyclable in assessing a companys ability to meet live maturing or short-run obligations? Acid-Test proportionDebt to Total Assets Ratio a. NoNo b. NoYes c. YesYes d. YesNo *11. Which of the following ratios should be employ in evaluating the military capability with which the company uses its assets? Receivables TurnoverPayout Ratio a. YesYes b. NoNo c. YesNo d. NoYes multiplex pickax Answerscertified public accountant Adapted fact Ans. period Ans. detail Ans. detail Ans. spot Ans. Item Ans. 1. c 3. b 5. b 7. b *9. c *11. c 2. c 4. b 6. c 8. c *10. d No. AnswerDerivation 1. cConceptual. 2. cConceptual. 3. bRevenue interrogatory $26,200,000 ? 10% = $2,620,000 gain shew $4,560,000 ? 10% = $456,000 Asset test $53,200,000 ? 10% = $5,320,000 A, B, C, E. 4. b($2,500,000 + $750,000) ? 10% = $325,000. 5. bConceptual. 6. c($300,000 + $600,000) ? 2 = $450,000. 7. bExtraordinary loss = $350,000 Insurance expense = $500,000 ? 4 = $125,000. 8. cConceptual. *9. cConceptual. *10. dConceptual. *11. cConceptual.