Advanced Financial Accounting 10th Edition

1) What account is debited in a debt service fund when it records matured interest payable? I. Interest Expense II. Expenditures A.I only B.II only C.Either I or II D.Neither I nor II Answer:[cpmembership level="2,3,4,5"] B[/cpmembership] 2) On March 1, 20X8, Wilson Corporation sold goods for a U.S. dollar equivalent of $31,000 to a Thai company. The transaction is denominated in

1) Which of the following statements concerning Form 10-Q is NOT true? A.It is filed for all four quarters B.It is the quarterly report to the SEC C.It contains an update on significant matters occurring since the last quarter D.It includes comparative financial statements prepared in accordance with APB 28 Answer:[cpmembership level="2,3,4,5"] A[/cpmembership] 2) A donor agrees

1) Infinity Corporation acquired 80 percent of the common stock of an Egyptian company on January 1, 20X8. The goodwill associated with this acquisition was $18,350. Exchange rates at various dates during 20X8 follow: Goodwill suffered an impairment of 20 percent during the year. If the functional currency is the Egyptian Pound, how much

1) Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First's common stock was equal to 20 percent of the book value of its

1) Dividends paid to noncontrolling shareholders: I. are reported as a cash outflow in the consolidated cash flow statement. II. represent funds that are no longer available to the consolidated entity. III. are reported in the consolidated retained earnings statement. A.Observation I alone is true B.Observation III alone is true C.Observations I and II are true D.Observations

1) The trial balance of WM Partnership is as follows: Wilfred and Mike decide to incorporate their partnership. The partnership's books will be closed, and new books will be used for W & M Corporation. The following additional information is available: 1> The estimated fair values of the assets follow: 2> All assets and liabilities

1) Flyer Corporation holds 90 percent of Kite Company's common shares but none of its preferred shares. On the date of acquisition, the fair value of the noncontrolling interest was equal to 10 percent of the book value of Kite Company. Summary balance sheets for the companies on December 31, 20X8, are as

On January 1, 20X9, Gulliver Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: At the date

1) Creditors may file which type of petition when seeking remedy under the Bankruptcy Code? I. Voluntary II. Involuntary A.I only B.II only C.Either I or II D.Neither I nor II Answer:[cpmembership level="2,3,4,5"] B[/cpmembership] 2) Paco Company acquired 100 percent of the stock of Garland Corp. on December 31, 20X8. The stockholder's equity section of Garland's balance sheet at that date

1) When deficiencies are found in a registration statement that must be corrected before the securities may be offered for sale, which of the following is issued by the SEC? A.An audit opinion B.A comment letter C.A customary review D.A comfort letter Answer:[cpmembership level="2,3,4,5"] B[/cpmembership] 2) Assuming no impairment in value prior to transfer, assets transferred by a

1) Note: This is a Kaplan CPA Review Question On January 1, 20X1, Poe Corp. sold a machine for $900,000 to Saxe Corp., its wholly-owned subsidiary. Poe paid $1,100,000 for this machine, which had accumulated depreciation of $250,000. Poe estimated a $100,000 salvage value and depreciated the machine on the straight-line method over 20

On December 31, 20X8, X Company acquired controlling ownership of Y Company. A consolidated balance sheet was prepared immediately. Partial balance sheet data for the two companies and the consolidated entity at that date follow: During 20X8, X Company provided consulting services to Y Company and has not yet paid for them. There were

1) All of the following are examples of how a parent company may lose control over a subsidiary and discontinue future consolidation, except: A.The parent sells some of its interest in the subsidiary B.The subsidiary issues additional common stock C.The subsidiary comes under the control of the government or other regulator D.The subsidiary issues a

1) A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires: A.only a footnote disclosure B.that the cumulative amount of the change be shown as a line item on the income statement, net

1) On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $300,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $150,000. The book values and fair values of Saturn's assets and liabilities were identical except

1) Revenues from parking meters and parking fines should be reported in the general fund when: A.received B.measurable and available C.measurable and earned D.available Answer:[cpmembership level="2,3,4,5"] A[/cpmembership] 2) On January 1, 20X6, Climber Corporation acquired 90 percent of Wisden Corporation for $180,000 cash. Wisden reported net income of $30,000 and dividends of $10,000 for 20X6, 20X7, and 20X8. On January

1) In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following question is independent of the others. Refer to the information provided above. Assume that David invests $50,000 for a one-fourth

1) The main guidance on equity-method reporting, found in ASC 323 and 325 requires all of the following except: A.the investor's share of the investee's extraordinary items should be reported B.the investor's share of the investee's prior-period adjustments should be reported C.continued use of the equity-method even if continued losses results in a zero

1) Tyler Company incurred an inventory loss due to a decline in market prices during its first quarter of operations in 20X8. At the end of the first quarter, management of the company believed the decline in market prices to be permanent. In the second quarter, the market prices of Tyler's inventories increased

1) Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on December 31, 20X8, for $125,000. Mortar owns 75

1) The balance in Newsprint Corp.'s foreign exchange loss account was $10,000 on December 31, 20X8, before any necessary year-end adjustment relating to the following: (1) Newsprint had a $15,000 debit resulting from the restatement in dollars of the accounts of its wholly owned foreign subsidiary for the year ended December 31, 20X (2) Newsprint

1) Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on December 31, 20X8, for $125,000. Mortar owns 75

1) ASC 270 uses which view of interim reporting? A.Integral B.Discrete C.Segmental D.Comprehensive Answer:[cpmembership level="2,3,4,5"] A[/cpmembership] 2) Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description. Descriptions a. Provides preliminary information to investors about an upcoming issue. b. Informs investors of an

1) Which of the following statements is true regarding the SEC's timeline for convergence? A.The SEC has no immediate plans to converge GAAP reporting with IFRS standards B.The SEC has a plan in place to allow firms to begin filing in the United States based on IFRS during the next several years C.The SEC has

1) Private Not-For-Profit (NFP) Entities. Select from this list of terms to answer the following questions. A. Fair value B. Unrestricted net assets C. GASB D. FASB E. Statement of Revenues, Expenditures, and Changes in Fund Balance F. Lower of cost or market G. Accrual method H. Statement of Activities I. General fund, restricted fund, endowment fund J. Modified accrual method K.

1) Rohan Corporation holds assets with a fair value of $150,000 and a book value of $125,000 and liabilities with a book value and fair value of $50,000. What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Helms Company pays $90,000 to acquire 75 percent ownership in

1) On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here: At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000,

1) The general fund of Gillette levied property taxes of $400,000 on November 1, 20X8. However, the property taxes are not collectible until May and August of 20X9. Assume Gillette reports on the calendar year. On Gillette's general fund balance sheet at December 31, 20X8, the property taxes levied on November 1 should: A.be

1) Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on December 31, 20X8, for $125,000. Mortar owns 75

1) The JPB partnership reported net income of $160,000 for the year ended December 31, 20X8. According to the partnership agreement, partnership profits and losses are to be distributed as follows: How should partnership net income for 20X8 be allocated to J, P, and B? A.Option A B.Option B C.Option C D.Option D Answer:[cpmembership level="2,3,4,5"] C[/cpmembership] 2) In the AD

1) Note: This is a Kaplan CPA Review Question On January 2, 20X5, Well Co. purchased 10 percent of Rea, Inc.'s outstanding common shares for $400,000. Well is the largest single shareholder in Rea, and Well's officers are a majority on Rea's board of directors. As a result, Well is able to exercise

1) On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was

1) The general fund of Hatteras acquired a fire truck during the fiscal year ended June 30, 20X9. The purchase order for the fire truck was recorded on February 15, 20X9. Hatteras' acquisition of the fire truck required which of the following sequences of accounting activities? I. Appropriation II. Encumbrance III. Expenditure A.II, I, III B.I, III, II C.III,

1) Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on January 1, 20X8, for $122,000. Mortar owns 75