Advanced Accounting 11th Edition

A. Representation on the board of directors. B. A significant portion of the stock is owned (perhaps 45%), with other ownership interests being widely scattered. C. Technological dependency. D. Material intercompany transactions. A. Representation on the board of directors. B. A significant portion of the stock is owned (perhaps 45%),

Module--Derivatives and Related Accounting Issues Key 1. Which of the following statements is true? A. The ability to settle the derivative by actually buying or selling the related asset is referred to as net settlement. B. The quantity or number of units specified by a derivative is known as

Chapter 1--Business Combinations: New Rules for a Long- Standing Business Practice Key 1. An economic advantage of a business combination includes A. Utilizing duplicative assets. B. Creating separate management teams. C. Shared fixed costs. D. Horizontally combining levels within the marketing chain. A. Utilizing duplicative assets. B. Creating separate management

38. On January 1, 20X1, Honey Bee Corporation purchased the net assets of Green Hornet Company for $1,500,000. On this date, a condensed balance sheet for Green Hornet showed: Book Fair Value Value Current Assets $ 500,000 $800,000 Long-Term Investments in Securities 200,000 150,000 Land 100,000 600,000

64. Rex Corporation, a U.S. firm with a calendar accounting year, agreed to buy a specially made truck from a Japanese firm for delivery on February 28, 20X2 with payment due on that date. On the same date the agreement was signed, November 1, 20X1, a forward contract due on

57. Lion Corporation, a U.S. firm, entered into several foreign currency transactions during the year. Determine the effect of each transaction on net income for that current accounting year only. Lion has a June 30 year end. Required: a. On January 15, Lion sold $30,000 (Canadian) in merchandise

Chapter 10--Foreign Currency Transactions Key 1. When an economic transaction is denominated in a currency other than the entity's domestic currency, the entity must establish a A. domestic rate. B. hedge rate. C. rate of currency change. D. rate of exchange. A. domestic rate. B. hedge rate. C. rate

58. Green Corporation, a wholly owned British subsidiary of a U.S. firm began the year with 1,300,000 British pounds in net assets. The subsidiary incurred a 65,000 British pound net loss for 20X1. The subsidiary issued common stock for 100,000 British pounds on November 15, 20X1. Assume the following exchange

Chapter 11--Translation of Foreign Financial Statements Key 1. The functional currency approach adopted by FASB 52 requires: A. separate statements be maintained by the domestic parent company and the foreign branch both in their own currencies B. separate statements be maintained by the domestic parent company and the foreign

46. Millstone Company's first-quarter 20X3, pretax income is $25,000. The company anticipates an annual tax credit of $5,500. Millstone is projecting income for the remaining three quarters of $95,000. For the second quarter of 20X4, Millstone reports $55,000 of pretax income with a projected pre-tax income for the remainder of

Chapter 12--Interim Reporting and Disclosures about Segments of an Enterprise Key 1. The primary emphasis of interim reporting is on: A. interim cash flow B. the interim statement of financial position C. interim retained earnings D. interim income data A. interim cash flow B. the interim statement of financial

A. a fiduciary relationship B. tenancy in partnership C. mutual agency D. the proprietary theory A. a fiduciary relationship B. tenancy in partnership C. mutual agency D. the proprietary theory A. a fiduciary relationship B. tenancy in partnership C. mutual agency D. the proprietary theory A. a fiduciary relationship B.

Chapter 14--Partnerships: Ownership Changes and Liquidations Key 1. Changes in partnership ownership are presumed to be arm's length transactions that may require which of the following actions? A. recognitions of goodwill to existing partners B. revaluation of existing partnership assets C. recognition of goodwill or other intangible assets attributable

Book value of previous partnership 150,000 Pattons contribution 50,000 Book value of new partnership 200,000 Pattons share 30 % 60,000 Pattons contribution 50,000 Bonus to Patton 10,000 Cash 30,000 Machinery 20,000 Capital, Lee (10,000 x 30%) 3,000 Capital, Alverez (10,000 x 40%) 4,000 Capital, Tyne (10,000 x 30%) 3,000 Capital

a. Estimated Revenues 450,000 Appropriations 392,000 Budgetary Fund Balance Unassigned 58,000 To record budget. b. Encumbrances 15,000 Fund Balance Assigned 15,000 To reinstate encumbrance. Expenditures 15,400 Vouchers Payable 15,400 To record voucher. Fund Balance Assigned 15,000 Encumbrances 15,000 To reverse encumbrance entry. c. Taxes Receivable Current 300,000 Allowance for Uncollectible

Chapter 15--Governmental Accounting: The General Fund and the Account Groups Key 1. A primary distinction between the flow of resources through a business enterprise and through a governmental entity is that operations in a governmental entity consume resources and assets to A. produce goods and services to citizens entitled

48. The following are selected activities for the Monterey City Natural Gas Company, a governmental entity: a. Billing for the year: To outside customers $400,000 To other Monterey City funds 70,000 b. Service provided to outside customers but not billed by year end totaled

Chapter 16--Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds Key 1. Which of the following activities would not be accounted for in a Special Revenue Fund? A. hotel taxes restricted for tourism expenditures B. lottery proceeds restricted for property tax relief C. interest earned on temporary investments

A. Government-wide financial statements B. a management discussion and analysis section C. funds based financial statements D. all of the above A. Government-wide financial statements B. a management discussion and analysis section C. funds based financial statements D. all of the above A. Government-wide financial statements B. a management discussion

Chapter 18--Accounting for Private Not-for-Profit Organizations Key 1. Which of the following is not a required characteristic of a private not-for-profit organization per the definition given by the AICPA? A. no owners or shareholders B. an operating purpose other than making a profit C. an organization dedicated to service

b. Cash 17,000 Special Events Support--Unrestricted 17,000 To record proceeds from rummage sales. Cost of Special Events 4,000 Cash 4,000 To record payment of direct costs. c. Cash 50,000 Legacies and Bequests--Unrestricted 50,000 To record legacy from Terry Well. d. Cash 230,000 Allowance for Uncollectible Contributions 12,000 Contributions Receivable 242,000

a. Accounts Receivable 300,000 Patient Service Revenue 300,000 To record billings. Provision for Bad Debts 15,000 Contractual Adjustments 45,000 Allowance for Uncollectible Receivables and Third Party Contractual Adjustments 60,000 To record 5% allowance. b. Cash 62,000 Allowance for Uncollectible Receivables and Contractual Adjustments 8,000 Accounts Receivable 70,000 To record settlement

66. The following events occurred as part of operations in Hard Knocks (private) University: a. To construct a new computer center, the University floated at par a $10,000,000 10% serial bond issued on January 1, paying interest December 31 and June 30. b. $100,000 for computer equipment

Chapter 19--Accounting for Not-for-Profit Colleges and Universities and Health Care Organizations Key 1. With the adoption of GASB statement #35 in 1999, public colleges and universities are required to report their activities in a manner more like a(n): A. general fund B. special revenue fund C. enterprise fund D.

Chapter 2--Consolidated Statements: Date of Acquisition Key 1. An investor receives dividends from its investee and records those dividends as dividend income because: A. The investor has a controlling interest in its investee. B. The investor has a passive interest in its investee. C. The investor has an influential

42. North Shore Railroad operates between Chicago and upper Michigan and Wisconsin. Dallas Ingold, purchasing manager of North Shore Railroad, anticipates the price of diesel fuel will increase over the next few months. On September 4th, Ingold purchased an out-of-the-money November call option for $1,100. The option has a notional

35. On December 31, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000). Any excess of cost over book value is due to the

Estate of Trent Tyler Charge and Discharge Statement For the Period January 15 through January 31, 20X9 As to Principal I charge myself with: Assets per original inventory $485,400 Assets subsequently discovered 450 Gain of disposal of mortgage 6,000 Total charges $491,850 I credit myself with: Loss on realization of

Chapter 20--Estates and Trusts: Their Nature and the Accountant's Role Key 1. In an intestate distribution, personal property is distributed A. under the laws of the state where the property is located. B. under the laws of the state in which the decedent was domiciled. C. directly to the

36. Rockee Corporation, a bio-tech firm, has found itself in financial difficulty and may file for bankruptcy. Rockee's Statement of Affairs reflects the following summary information: Book value of assets $700,000 Net realizable value of assets 370,000 Total liabilities 400,000 Secured claims 250,000 Unsecured claims with priority 30,000

Chapter 21--Debt Restructuring, Corporate Reorganizations, and Liquidations Key 1. Which of the following is an illustration of an action that can be taken to help a troubled firm without using the court system? A. asset transfers to settle debt B. equity interest granted in exchange for debt C. modifications

Chapter 3--Consolidated Statements: Subsequent to Acquisition Key 1. The method of accounting for subsidiaries that better reflects the investment account on parent-only financial statements is the A. cost method. B. simple equity method. C. investment method. D. sophisticated equity method. A. cost method. B. simple equity method. C. investment

28. On January 1, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $316,000. On this date, Subsidiary had common stock, other paid-in capital, and retained earnings of $40,000, $120,000, and $190,000, respectively. Net income and dividends for 2 years for Subsidiary Company were as follows:

Consol. Control. Consol. Income Retained Balance Account Titles Statement NCI Earnings Sheet Inventory, December 31 172,000 Other Current Assets 683,000 Investment in Sub. Company 0 Other Long-Term Investments 80,000 Land 220,000 Buildings and Equipment 695,000 Accumulated Depreciation (314,000) Goodwill 150,000 Other Intangibles 60,000 Current Liabilities (230,000) Bonds Payable (100,000)

Answer 4-2 Trial Balance Eliminations and Prange Seaman Adjustments Account Titles Company Company Debit Debit Credit Inventory, December 31 100,000 105,000 (EI) 8,000 Other Current Assets 285,000 325,000 (IA) 20,000 Investment in Sub. Company 588,000 (CY) 48,000 (EL) 360,000 (D) 180,000 Land 140,000 80,000 Buildings and Equipment 315,000 340,000 Accumulated

Chapter 4--Intercompany Transactions: Merchandise, Plant Assets, and Notes Key 1. Which of the following should appear in consolidated financial statements? A. All intercompany transactions properly recorded on each affiliates books. B. Transactions between the consolidated company and outside parties. C. Transactions not accounted for by the simple equity method.

Consol. Control. Consol. Income Retained Balance Account Titles Statement NCI Earnings Sheet Interest Receivable 0 Other Current Assets 554,900 Investment in Sub. Company 0 Investment in Sub. Bonds 0 Land 150,000 Buildings and Equipment 690,000 Accumulated Depreciation (220,000) Goodwill 150,000 Interest Payable 0 Other Current Liabilities (184,000) Bonds Payable,

47. On January 1, 20X1 Parent Company acquired 90% of the common stock of Subsidiary Company for $360,000. On this date, Subsidiary had common stock, other paid in capital, and retained earnings of $50,000, $100,000, and $200,000 respectively. Any excess of cost over book value is due to goodwill. Parent

Chapter 5--Intercompany Transactions: Bonds and Leases Key 1. The usual impetus for transactions that create a long-term debtor-creditor relationship between members of a consolidated group is due to the: A. subsidiary's ability to borrow larger amounts of capital at more favorable terms than would be available to the parent.

40. Plymouth Company holds a 90% interest in Savannah, Inc., which was acquired in a previous year. As of the end of the current fiscal period, the following information is available: Plymouth Savannah Company Inc. Internally generated net income $80,000 $60,000 Weighted average common shares outstanding

Chapter 6--Cash Flow, EPS, and Taxation Key 1. The cash purchase of a controlling interest in a firm requires disclosure on the consolidated statement of cash flows as a(n) A. financing activity only. B. financing activity and in the schedule of noncash financing and investing activity. C. investing activity

36. On January 1, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $300,000. Any excess of cost over book value on this date is attributed to a patent, to be amortized over 10 years. On this date, Subsidiary had total shareholders' equity as follows:

34. On January 1, 20X1, Pepper Company purchased 90% of the common stock of Salt Company for $360,000 when Salt had total shareholders' equity as follows: 8% Preferred Stock, $100 par $100,000 Common Stock, $10 par 50,000 Other Paid-in Capital 120,000 Retained Earnings 180,000 Total $450,000

Chapter 7--Special Issues in Accounting for an Investment in a Subsidiary Key 1. A new subsidiary is being formed. The parent company purchased 70% of the shares for $20 per share. The remaining shares were sold to a variety of outside interests for an average of $22 per share.

Purchase of treasury shares results in parent having a 75% interest. [12,000 x 60% = 7,200; 7,200 / (12,000 - 2,400) = 75%] For the worksheet solution, please refer to Answer 8-7. Answer 8-7 Parrot and Swallow Consolidated Partial Worksheet For the Year Ended December 31, 20X5 Trial Balance

30. On 1/1/X1 Poncho acquired an 80% interest in Stroller for $560,000 when Strollers equity consisted of $530,000 paid-in capital and $100,000 Retained Earnings. Any excess of purchase price over was attributed to goodwill. On January 1, 20X6, Stroller had the following stockholders' equity: Common stock ($20 par) $180,000

Chapter 8--Subsidiary Equity Transactions, Indirect Subsidiary Ownership, and Subsidiary Ownership of Parent Shares Key 1. A parent company owns a 100% interest in a subsidiary. Recently, the subsidiary paid a 10% stock dividend. The dividend should be recorded on the books of the parent A. at the par value

A. measurement B. denominated C. purchasing D. selling A. measurement B. denominated C. purchasing D. selling A. measurement B. denominated C. purchasing D. selling A. measurement B. denominated C. purchasing D. selling A. measurement B. denominated C. purchasing D. selling A. measurement B. denominated C. purchasing D. selling A. should